Thailand’s leading bank Kasikornbank (or KBank), in collaboration with IBM, has developed a new enterprise Letter of Guarantee network based on IBM Blockchain.
By simplifying and expediting procedures for KBank's Letter of Guarantee process, the new solution aims to improve the customer experience, strengthen security, and reduce costs for clients and the bank. Powered by blockchain, KBank's enterprise Letter of Guarantee solution helps to the make the process paperless, reduce time, eliminate forgery, and provide efficient service.
"Blockchain technology is applied to create highly secure networks of document filing and retrieval," said Pipit Aneaknithi, president of KBank. "As Thailand's largest issuer of Letters of Guarantee, KBank is working with IBM to implement this innovative technology to further define and articulate our leadership in this market."
According to the official release, Letters of Guarantee issued via Thailand’s commercial banking system are expected to reach over $40 billion, increasing by 8 percent in 2017. Of that total, nearly $9 billion will be issued by KBank, which has the largest share of the market at 25 percent. Moreover, the bank is targeting an increase in Letter of Guarantee issuance via electronic channel to 35 percent by the 2018 year-end, 5 percent of which will be processed via the blockchain.
Built on Hyperledger Fabric, a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation, the solution was tested in the Bank of Thailand's regulatory sandbox and built to be able to scale up to meet an expected increase in Letters of Guarantee issuance through electronic channels. By offering a single, shared data structure, the solution is also expected to help deliver new business opportunities with other banks in the region.
"Blockchain reduces traditional transaction barriers and can help to improve business processes in the financial services sector and beyond," said Parnsiree Amatayakul, managing director of IBM Thailand. "As IBM continues to support KBank's important initiatives in blockchain, the value this technology can bring to the bank and its clients is becoming increasingly clear, and can redefine the way businesses in the region operate and grow."
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