Fourteen Italian banks have successfully completed the first phase of
Fourteen Italian banks have successfully completed the first phase of the blockchain trial for interbank reconciliation. The trial was conducted using R3’s platform. In the trial phase the second largest bank in Italy, Intesa Sanpaolo also participated. After the successful trial, the project is now moving towards the next stage.
The pilot project was led by ABI Lab and started on 4th June and finished last week. ABI Lab is the research and developments (R&D) centre for banking technologies which was established in 2001. The lab is an initiative of the Italian Banking Association (ABI). The aim of creating ABI Lab is to create a network between banks and ICT companies and to focus on the new technologies for internal process re-engineering and new service development.
The aim of the project is to improve interbank transactions. Reconciliation of interbank transaction is a complex process. On each transaction, if both banks are agreeing then it is ok but both do not agree then it takes lots of time to resolve the discrepancies. Currently, there is a lack of standardized process and a single communication protocol which increase the chances of discrepancies. The project will improve transparency, speed up execution, and perform a check for interbank transactions.
Blockchain technology will help to quickly identify the interbank transactions that do not match and enable the development of standard processes and communication protocol. So after the project implementation transparency will be enhanced for interbank transactions.
In the 10-month proof of concept and testing phase, a node was assigned to each bank. The banks uploaded actual bank data and during the trial phase, 1,200,000 transactions have been processed.
Blockchain consortium start-up R3 has developed a platform called Corda Enterprise on which the interbank system is built. R3 offers Blockchain Application Firewall. With R3’s Corda each pair of the bank will be able to share the information and communicate securely. The project is also utilizing the network infrastructure of Italian enterprise network company SIA.