DBS Bank cooperates with Standard Chartered PLC on developing distributed ledger technology for trade finance in Singapore.
DBS Bank Ltd, a Singaporean multinational banking and financial services company, has recently cooperated with Standard Chartered PLC, a British multinational banking and financial services company, on developing distributed ledger technology for trade finance in Singapore.
According to Bloomberg, both parties have completed tests on the technology and will start working with other companies next year. As said by Shirish Wadivkar, head of Payables, Receivables & Flow FX at Standard Chartered, and Lum Yin Fong, DBS’s Global Head of Client Management and Implementation, estimates on development costs are not available yet.
The banks are developing a new approach that could transform the trade finance business by speeding up banking transactions, while cutting costs and boosting transparency. The parties are looking for ways to maintain trade-finance operations in Asia that have been restricted by slowing economic growth in the region and slumping commodity prices.
Nowadays there is a large number of financial companies embracing the distributed ledger technology, which demonstrates that its huge potential is being recognized.
For instance, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has recently informed it is going to explore blockchain under the initiative named the Global Payments Innovation (GPI) Initiative. The project is targeted at leveraging the benefits of the bitcoin technology to enhance cross-border payments.
With the new initiative, SWIFT plans to accelerate the process of making international payments and make it more transparent. At first, the initiative will concentrate on business-to-business payments backed by participating banks. Planned to start in the beginning of 2016, GPI will help corporates to enhance supplier relationships and expand their international business.
Sberbank, Russia’s biggest bank, has recently announced its intention to partner with the global consortium of 30 banks and financial institutions led by New York-based R3. The consortium is targeted at developing secure and adaptable world standards for the use of the technology in the financial industry.
Leve Khasis, Sberbank’s First Deputy Chairman of the Management Board, noted that the bank is watching closely the evolution of the technology behind Bitcoin. Besides, he said that the bank is looking into the documentation pertaining to R3 and pending a final decision. However, he did not negate the possibility of joining the consortium. Khasis specified that Sberbank will be the first bank to use blockchain solutions as soon as the industry adopts it.
Furthermore, over the last year, the FinTech industry has been showing rapid growth, while the overall investment in the sector reached millions of dollars. According to CB Insights, in Q3 of 2015, the investment into FinTech startups accounted for $4.85 billion. Some of the most influential bankers on Wall Street are entering FinTech in an attempt to transform traditional financial businesses.
Blythe Masters, former JPMorgan’s executive, has recently declined an offer to lead Barclays’ investment division to concentrate on her blockchain startup Digital Asset Holdings. At the moment, she is an active supporter of the blockchain technology and compares it with the development of Internet in the 1990s.
Digital Asset Holdings is developing software based on the distributed ledger technology to help financial industry players to change the way of financial assets trading.
Among other banking industry players who quit Wall Street to work in FinTech are ex-CEO of Citigroup, Vikram Pandit, and former head of Morgan Stanley, John Mack.