IBM today announced a managed blockchain platform for the financial services industry and said nine banks, including Barclays and Citi, are participating in the proof of concept (PoC).
The platform, developed in partnership with foreign exchange market infrastructure firm CLS, is called LedgerConnect. It’s designed to enable banks, buy- and sell-side firms, financial technology companies, and software vendors to deploy, share, and consume services hosted on a shared distributed ledger network. It’s based on an enterprise blockchain service that IBM launched last year that’s built on the Linux Foundation’s Hyperledger Fabric technology.
Blockchain technology uses a distributed database that effectively creates a tamper-proof ledger. Because of this built-in security, banks and other heavily regulated organizations are looking to use the technology in their processes and to build new blockchain-based applications and services.
The financial institutions participating in the PoC will use blockchain-based services from vendors including Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap, and Persistent Systems, according to IBM.
After they’ve completed the PoC and received all the needed regulatory approvals, IBM and CLS plan to make the platform widely available.
$140M Deal With Thai Bank
IBM didn’t name the other seven banks that are part of the new blockchain initiative. But it did announce a new $140 million contract with Thailand bank Krungsri that will focus on digital banking. Krungsri is the fifth-largest financial group in Thailand in terms of assets, loans, and deposits.
IBM and Krungsri first began working together in 2012 under an agreement focused on infrastructure-as-a-service (IaaS). In 2017, the bank completed a blockchain pilot using IBM’s platform.
Krungsri exchanges a large number of banking contract agreements daily between its subsidiaries. The IBM blockchain pilot automated the contract management of these “related party transactions.” This process made the transactions more secure, transparent, faster, and efficient, according to the bank.
The extended contract between IBM and Krungsri covers managed services across IBM’s z14 mainframes, servers, network, ATMs, and storage.