IBM, CLS And Banks Are Testing A Blockchain App Store Called LedgerConnect
Tech giant IBM has partnered with foreign exchange settlement provider CLS and nine other financial banking institutions like Citigroup Inc, Barclays PLC and others to launch a financial blockchain “app store” called LedgerConnect.
The basic purpose behind launching this app store is to make it easy for banks easily access the DLT solutions from several software and fintech providers, and for the vendors to reach out to banks quickly and effectively. This proof of concept (PoC) is quite similar to a consumer app store which makes it easier and cheaper for financial firms to use the blockchain-based software’s.
All the participants involved in developing this platform have selected vendors which include Copp Clark, Calypso, Baton systems, IBM, Persistent Systems, Phases, SynSwap, and OpenRisk. Some of the DLT-based services that the financial institutions can access using the LedgerConnect include KYC process, collateral management, sanction screening, derivatives post-trade processing and reconciliation and market data.
“By hosting these services on a single, enterprise-grade network, organizations can focus on business objectives rather than application development, enabling them to realize operational efficiencies and cost savings across asset classes,” reports Forbes.
Many industry experts have suggested that blockchain can provide around $7-12 billion as post-trade savings and $5 billion in KYC, however, these savings require a secure network and standardized processes to connect them said Keith Bear, vice president, Global Financial Markets, IBM.
Bear said: “We are taking the experience we have with blockchain over the past few years and creating this network. Having a secure network and proven infrastructure allows an app store kind of model, where banks can identify applications from certified fintech and software providers and deploy these apps over a seamless blockchain network.”
Alan Marquard, Chief Strategy and Development Officer, CLS said: "LedgerConnect is part of CLS's strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets. We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks.”
He also added that the platform is still in the early stages of its development by adding that “The initial version of the app store is being built. We are working with fintechs and software OpenRisk and SynSwap and the banks that have elected to start testing for reconciliation, margin management, etc.”
The major focus of the LedgerConnect app store will be on the capital markets and wholesale banking while it will be useful in other areas like retail banking and insurance. Additionally, it can also be used in areas like mortgage, regulatory reporting and digital identification, an area on which IBM is already working with SecureKey. Bear said that more announcements will be followed by the SWIFT Sibos, show.