In a recent blockchain trial, ING, along with Calypso Technology and R3 blockchain consortium, proved that the technology can help facilitate easier interaction in banks’ back-end infrastructures when processing trades.
Earlier in April, Calypso announced that it was developing a DLT application for trade matching confirmations in collaboration with R3 and a group of global financial institutions including Westpac Banking Corporation in Sydney, ING in Amsterdam, BBVA in Madrid, Banco de Credito del Peru (BCP) in Lima, and a large investment management firm in the US.
The partners carried out trade matching tests on R3’s distributed ledger technology platform Corda to process FX trades, and confirmed correct matching in real time across four different time zones, ING said.
“This is a big step in changing the way institutions process trade contracts,” said Ivar Wiersma, head of Wholesale Banking Innovation at ING.
By releasing a ‘golden copy’, which becomes the single source of truth, the newly-tested trade matching application allows traders involved in a transaction to look at the same information. Each trader can then update their records in one common data set instead of collecting information from different systems.
“Behind two participants dealing together, there are multiple sets of data that need to be compatible to release contracts whose contents match. Currently, there are different sources of truth and various electronic messages. This slows down the process and can often lead to mismatches or duplications that need to be fixed manually,” Robbert Zee, who was part of the working group on ING’s side, said. “Using one source of proof is a great advantage for security and compliance reasons: regulators can have a real-time overview of the trades by linking in to the network to follow trade partners’ actions.”
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