Secure financial messaging services provider SWIFT announced Thursday that 22 additional global banks had joined its blockchain proof of concept (PoC). The PoC is designed to validate whether the technology can help banks reconcile international nostro accounts in real time.
In a press release relaying the news, SWIFT said the PoC is part of its global payments innovation service, a new standard for cross-border payments.
“Collaboration is the cornerstone of innovation,” said Wim Raymaekers, head of banking markets and SWIFT gpi at SWIFT. “This new group of banks allows us to greatly extend the scope of multilateral testing of the blockchain application and thus add considerable weight to the findings. We warmly welcome the new banks and look forward to their insights.”
According to SWIFT, the financial institutions involved in the PoC include: ABN AMRO Bank, ABSA Bank, BBVA, Banco Santander, China Construction Bank, China Minsheng Banking, Commerzbank, Deutsche Bank, Erste Group Bank, FirstRand Bank, Intesa Sanpaolo, JPMorgan Chase Bank, Lloyds Bank, Mashreq Bank, Nedbank, Rabobank, Société Générale, Standard Bank of South Africa, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, UniCredit and Westpac Banking Corporation.
The banks will test and validate the PoC’s blockchain application, which is currently under development by SWIFT and a group of six PoC founding banks. Working independently of the founding banks, the 22 institutions will act as a validation group to further test the application and evaluate how the technology scales and performs.
Launched at the start of the year, the PoC aims to help banks overcome challenges in monitoring and managing international nostro accounts, which are crucial to the facilitation of cross-border payments. Currently, banks cannot monitor their account positions in real time due to lack of intraday reporting coverage.
“The potential business benefits ensuing from the PoC are clear,” says Damien Vanderveken, head of research and development, SWIFTLab and UX at SWIFT. “If banks could manage their nostro account liquidity in real time, it would allow them to accurately gauge how much money is required in each account at any given point, ultimately enabling them to free up significant funds for other investments.”