Though at the dawn of the development of blockchain technology, traditional financial and banking institutions didn’t pay much attention to it, now owing to the potential of this technology, the attitude of such institutions towards it has definitely changed.
Without any doubts, the announcement that has been recently made by JPMorgan only proves the above-mentioned thesis. The Interbank Information Network (IIN) which is the first blockchain service offered by the firm has been expanded to more than 75 banks and it is the largest number of banks that have joined a live application of blockchain technology.
Speaking about their major achievement, Takis Georgakopoulos, Global Head of Treasury Services at JPMorgan, stated:
“We’ve been actively exploring how emerging technologies such as blockchain, AI, and an enhanced digital experience can be deployed in our Treasury Services business to better serve our clients’ ever changing needs. We will lead the market with the rollout of a robust pipeline of innovations over the coming months, beginning with the launch of IIN.”
The Interbank Information Network was launched as a pilot in 2017. It is aimed at addressing the issues that currently exist in the global payments system. The INN is able to facilitate payment processes, reducing the time needed for transferring funds and reducing the number of steps that should be fulfilled.
Through the application of blockchain technology, it is possible to prevent delays in payments caused by the necessity for correspondent banks to spend time on responding to compliance and other data-related inquiries. The platform is powered by Quorum which is the Ethereum-based blockchain network by JPMorgan.
Describing the potential of the IIN, Emma Loftus, Head of Global Payments and Receivables at J.P. Morgan Treasury Services, said:
“We saw tremendous interest among correspondent banks after the pilot launched in 2017, asking if they could join. We believe IIN will significantly improve the efficiency of cross-border payments, particularly as more banks participate and we evolve the functionality and use cases beyond compliance-related inquiries.”
Now over 70 new banks, the list of which includes such prominent names as Société Générale and Santander, have taken a decision to join the INN. The network has been being under testing held by JPMorgan, Royal Bank of Canada and ANZ for 11 months already.
The main idea behind creation of this network is a to build a mutually-accessible ledger across banks which could enable them to address such issues as compliance checks, faulty or missing data as soon as possible, since now it can take up to weeks. It is expected that it will be possible to conduct about 14,500 US dollar-denominated payments per day via the expanded network.
Though today more and more traditional banks are beginning to realize the benefits that blockchain technology can bring to the industry, mass adoption may take rather a long period of time due to bureaucratic issues and lack of trust from the side of customers.