SWIFT Tests Determine Blockchain Can Improve Real-Time Nostro Reconciliation

The network handling the majority of modern international interbank messages, SWIFT (Society for Worldwide Interbank Financial Telecommunication), has published an interim report its proof of concept (PoC) for real-time Nostro reconciliation using Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term or distributed ledger technology (DLT). The sandbox tests were done in collaboration with 33 global transaction banks.

Preliminary results show that the application can deliver the business functionalities and data richness required to support real-time liquidity monitoring and reconciliation. DLT provides real-time visibility to both the account owner and its servicer on the available and forecasted liquidity on the Nostro account and supports payment reconciliation and investigations by providing an enriched data model.

“The DLT PoC supports SWIFT’s goal of making cross-border Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term more efficient – a mission we have championed through SWIFT gpi, which offers customers fast, transparent and traceable cross-border payments,” says Wim Raymaekers, Head of Banking Market and SWIFT gpi at SWIFT.

It also helped identify issues that still need to be addressed to achieve industry-wide adoption. Specific challenges include the need to develop unique value propositions in response to the different levels of sophistication, automation and past investments of banks. In addition, SWIFT says that it is crucial that integration with legacy back office applications and co-existence with existing processes is taken into account.

“Preliminary results from the DLT PoC are positive for this use case,” adds Damien Vanderveken Head of Research and Development, SWIFTLab and User Experience at SWIFT. "Significant progress has been made, but it is still early days for the latest generation of Blockchain technology, and it will take time before it is mature and scalable enough for mission critical applications.”

SWIFT’s DLT PoC started in April 2017 and will conclude in November 2017, with the final results available in December.