One of the sectors that stand to benefit massively from the emergence of blockchain technology is the financial services sector. The way transactions are conducted can be changed permanently for the better, with blockchain technology allowing for these payments to be processed quickly and at a low cost.
Banks, in particular, understand this trend and are looking to take advantage of blockchain technology to try and get ahead of their competitors.
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IBM has just launched a trial phase for their blockchain platform that is focused on the financial services sector. They are going deep with this type of technology.
Blockchain technology can help everything perform more effectively and efficiently from transactions to settling trades and the issuance of loans.
IBM has worked on this platform alongside CLS, which is a firm which specializes in the infrastructure of foreign exchange markets. This platform has been called LedgerConnect and it is currently a proof of concept platform.
It aims to apply blockchain technology in a variety of ways for the financial services sector, such as in the screening processes, know your customer protocols, management of collateral, market data, reconciliation and the processing of derivatives in the post-trade phase.
There are currently numerous companies in the space working on similar projects, such as R3 who have been working with a number of different banks.
Other financial institutions have hired in-house teams to develop their own platforms. IBM has relationships with nine different banks as part of this project, including the likes of Citi and Barclays.
They will be part of the trial phase and if it proves to be a successful test run, it will be rolled out as a one-stop shop for the sector as a whole. Once they successfully prove the concept, receive approval from the relevant regulators and there is enough demand in the market for the platform, this rollout can begin.
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