In a process facilitated by Swift, for decades banks have made correspondent relationships with partners in other countries to access their local payment systems and currencies in order to carry out cross-border transactions.

But because the system relies on a bank opening a local currency, Nostro, account with the foreign provider, there ends up being two separately held versions of the account statement that need to be maintained and reconciled.

ANZ and Wells Fargo say that this leads to poor payment transparency, onerous reconciliation activities and investigations, delays in advising of fund disbursement, and inefficiencies in management and usage of liquidity and funding.

The pair argue that blockchain can help address these problems by creating a single record of account that can be shared and maintained by lots of correspondent banks.

The two banks have delivered a proof of concept, creating a shared distributed ledger platform they say demonstrates the potential to improve the efficiency and speed of cross-border correspondent banking payment reconciliation and settlement, while operating in parallel with existing infrastructure.

Nigel Dobson, GM, wholesale digital and transformation projects, ANZ, says: "The success of our proof of concept highlights what can be achieved when technology and business innovation are combined with cross-industry collaboration."

Dobson hopes the results will form the basis of further discussions and knowledge-sharing across the industry.

"While this joint initiative has advanced our collective thinking on innovations in this space, the networked nature of both this problem and the proposed DLT solution means the full benefits will only be realised through broad industry participation and adoption," he says.

Read a white paper on the project here: