Banks have been shaken up by distributed ledger technologies worldwide. Italy is no exception, and its largest bank, Intesa Sanpaolo, has also been exploring the advantages of blockchain in finance.
Blockchain Application Firewall
First, the bank have announced their participation in testing a blockchain application firewall with 13 other international banks. Their Blockchain Application Firewall has been developed by R3, the makers of Corda, and allows for deployment in corporate data centers, while maintaining the ability to communicate securely with nodes around the world. It is a purpose-built application, with industry-leading security features.
The test started on 4th of June, when all the participating banks installed the nodes, and ran since then 1.2 million transactions with real banking data. The aim of the project is to standardize interbank transactions and speed up filtering erroneous transactions.
Better Trade Finance
Intesa Sanpaolo also participates in the Letter of Credit blockchain platform called Voltron. Voltron aims to decrease inefficiencies in trade finance.
Global trade finance is a huge market: about 80% of world trade relies on trade credit and insurance or guarantees. Yet the market is full of inefficiencies: most agreements are still issued on paper, with several parties handling a single transaction. Blockchain could provide the perfect tool to improve the inefficiencies of the market.
The goal of Voltron is to digitalize Letter of Credit processes and make processes more efficient by sharing data on the blockchain between parties. This improves trade finance for companies, insurers and banks as well, as they are able to make faster financing decisions and decrease reconciliation by having all the information on a shared ledger.
Intesa Sanpaolo is one of the early-adopters of blockchain technology, and participates in leading industry initiatives to find practical use cases to distributed ledger technology. They are diving into the potential to bring with blockchain a more transparent, secure and efficient world of finance.