The Postal Savings Bank of China (PSBC) said that it has worked with IBM to develop a platform for asset custody based on blockchain technology.
The bank, which has 40,000 branches across all regions of China and focuses particularly on providing financial services for small to medium enterprises (SMEs), added that it had worked with the US group using the hyperledger fabric to create the first deployment in China to apply blockchain technology to asset custody in the financial industry.
PSBC added that it has also successfully executed more than 100 real business transactions on the blockchain involving buying and selling bonds since the system went live in October 2016. During its two-month trial, the bank “saw improvements in the traditionally complex credit verification process and was able to manage risk, helping financial institutions operate more securely and efficiently.”
As one of PSBC’s core businesses, asset custody now represents an approximately four trillion renminbi (RMB) business. Asset custody process typically involves multiple parties, including financial institutions, clients, asset custodians, asset managers and investment advisors and auditors.
Each transaction involves the settlement of large sums of money and multiple participants exchanging data, each with its own information system and often relying on verification systems such as telephone, fax and mail; potentially creating delays, discrepancies and risk with reporting between entities.
During the trial, the system “demonstrated blockchain’s ability to help streamline the traditionally complex credit verification process and manage risk, helping financial institutions operate more securely and efficiently”, while the technology’s inherent security and efficiency help to “improve the process of trading and communicating with multiple parties in the asset custody ecosystem”.
Lyu Jiajin, president of PSBC, commented: “Blockchain technology has the potential to eliminate the trust frictions in financial business activities at a very low cost and creates trust and enables the efficient exchange of information for all the parties involved in transaction. This technology has the potential to fundamentally transform the financial industry.
“Today, with a booming fintech and business innovation in financial industry, we expect to join hand with more financial institutions to build the ecosystem for financial industry based on blockchain technology.”
Criticisms of bitcoin by JP Morgan Chase’s boss have been denounced by a UK academic as “ironic” and “hardly surprising” considering the impact bitcoin could have on financial intermediaries.
Leaked documents from the UK Home Office proposing that low-skilled EU migrants would be restricted in the UK’s post-Brexit immigration scheme may be more likely to increase automation and off-shoring of labour, rather than increase British wages, industry experts have warned.
The European Central Bank's (ECB) hotly anticipated meeting on Thursday afternoon made the euro skyrocket, as president Mario Draghi announced interest rates would remain at 0% and its quantitative easing programme will stay until at least the end of 2017.
The “sad truth” of banking is that many jobs will be automated in the future, Deutsche Bank's chief executive said yesterday. Despite this, a recent survey found that 98% of European workers are optimistic about the changes automation will bring to their workplace.