RBS and Barclays Bank have completed a blockchain trial with R3's distributed ledger software which reduced the time taken to complete a property transaction from three months to less than three weeks.
The trial, conducted by real-estate transaction outfit Instant Property Network, ran end to end transactions using test data through a new distributed ledger to simulate property sales over a five day period.
Currently, the property market is operating on an archaic paper and email-based foundation which, despite the use of technology in some aspects of the process, remains complex, slow, and inefficient. On average, eight parties plus the buyer and seller are involved in each property transaction, with information shared via dozens of documents, platforms and databases.
The trial showcased how duplications and costly reconciliation processes could be removed from the buy/sell process, with the first transaction taking less than an hour to complete. As a result, it is estimated that, with the addition of off ledger business process and consumer decisions, the end to end buy/sell process could be reduced from over three months to less than three weeks. IPN estimates that if applied globally, the annual savings to the property market would reach approximately $160 billion.
Dan Salmons, director for mortgage innovation at RBS, says: “We are committed to making home buying as effortless as possible for our customers, and are at the forefront of innovations that enable us to do that. We see real potential for Blockchain to transform the process, and so have been delighted to take part in the innovative IPN trial.
"What has made a real difference here is that R3 has brought representatives of all the key parties involved in the process together, so as a result we can see the potential for a network of this kind to improve transparency and speed for customers, and reduce cost and complexity for all involved. IPN has given us our best view yet of what a future end-to-end journey could look like.”
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