ANZ, Commonwealth Bank and Westpac are joining forces with IBM and shopping centre giant Scentre Group to pilot a blockchain-based platform for managing bank guarantees.
Thousands of merchants around Australia need bank guarantees to secure a lease over a retail tenancy. Historically, these guarantees have been issued manually and on paper, with the process taking up to a month.
The new platform, dubbed Lygon, uses blockchain technology to slash the time to as little as a day, while also promising to reduce the risk of fraud and the potential for errors.
Following a 2017 proof-of-concept, the partners are now embarking on an eight-week pilot involving lease holders with outlets in Scentre centres that will use live data and transactions.
After the pilot, Lygon plans to offer access to the platform to all issuers, applicants, and beneficiaries and add support across other industries.
Michael Thorpe, DD, future cities, institutional banking and markets, CBA, says: "While the pilot is focussed on retail property leasing, the digitisation of bank guarantees would benefit many other industries and geographies where bank guarantees, or standard letters of credit, are used."