- Three out of the ‘big four’ Australian banks confirmed their collaboration on creating a new company that will be aimed at digitizing bank guarantees.
- It is entirely based on Blockchain technology.
- The pilot tests for the company took place last year.
Blockchain technology has a wide range of usage in the financial world. Many banks around the globe have successfully integrated the technology into their payment systems. Its efficiency and transparency is the main reason why it has seen an increasing curve of its usage in the past few years.
Recently, three out of the ‘big four’ Australian banks confirmed their collaboration on creating a new company that will be aimed at digitizing bank guarantees and is entirely based on Blockchain technology. The pilot tests for the company took place last year.
Lygon Will Make Work Easier for Commercial Landlords and Banking Institutions
The new company is named Lygon. The Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation have decided to build a company which will be focused on providing both time and cost efficiency for the commercial landlords.
As mentioned above this company’s primary focus is to convert the commercial lease guarantees into a much more compatible digital form. However, CEO of Lygon, Nigel Dobson ensured that small businesses will be protected at all costs.
IBM’s Versatile Hyperledger Technology to be Utilised in the Project
Apart from the above mentioned banks, the company has two other major shareholders Scentre Group and the tech giant, IBM. Bank Guarantees are an essential contract when it comes to a debt. It makes sure that the debt will be paid on the specified time without any fail.
Currently, bank guarantees are associated with long and tiring procedures. They are still paper based hence the banks and companies saw this an opportunity to digitize them. IBM offers a very versatile hyperledger technology which can be effectively leveraged to digitise the guarantees and cut the issuance time to one day.
Expand Their Technology and Create New Opportunities
Dobson said that the commercialisation of the new Lygon platform marks a new milestone of blockchain technology in the country. He further added that they have transformed the entire bank guarantee procedures into a three way contract. He ensured the digitalization of the paperwork, the process and the legality behind the bank guarantees.
Apart from all these, the banks have explained their plan to further expand their ventures in digitising bank guarantees. They will focus on spreading their business in New Zealand while keeping a keen interest on the much used cross border guarantees.