ABI Lab, in collaboration with NTT Data Italia, is working on a blockchain proof-of-concept for straight-through processing of interbank reconciliations using R3’s Corda platform, Finextra reported.
ABI Lab will look into the potential of distributed ledger technology (DLT) to address issues such as the time taken to identify mismatched transactions between two banks, lack of a standardised process and communication protocol, and limited visibility of transactions between parties.
By using DLT, Corda helps to resolve the inconsistencies in mismatched data by providing a single, immutable record of each transaction.
“The success of this pilot will simplify the resolution of the suspended movements in the correspondent accounts between banks in terms of better efficiency, transparency and speed of this process. Starting from a simple area using DLT can be a good solution to pave the way for future implementations with a stronger knowledge on these tools generated from a sector-level project,” Pierfrancesco Gaggi, president of ABI Lab, said.
Founded in 2001, ABI Lab, the R&D Centre for Banking Technologies, was an initiative of the Italian Banking Association (ABI) with the aim to create a network between banks and ICT companies and of doing research activities on innovative technologies to manage processes, channels and security in banking.
“The manual processes and systems used for interbank reconciliation are time-consuming, costly, labour-intensive and error-prone. Working with ABI Lab we are using Corda to automate the matching process, helping Italian banks avoid mismatches and improve efficiency and accuracy across the board. This PoC will demonstrate how easy it is for banks to reduce their operational and back office costs, while saving time and communicating securely by utilising DLT,” David Rutter, CEO of R3, said.
