Reimagining Financial Services with Blockchain

Share this post:

Across every industry today, organizations are looking to streamline and automate processes to reduce costs, gain efficiencies, radically improve speed to market and achieve better business outcomes. The financial services industry in many ways is at the forefront of such initiatives – with particular focus on today’s currently disjointed and redundant processing and reconciliation challenges – which if resolved, would drastically reduce cost and improve quality across the entire ecosystem.

A good example of innovative leadership in this area is DTCC. DTCC, together with its member banks, is currently reimagining credit derivatives processing using blockchain in a path breaking project.

Blockchain technology provides a permanent record of transactions which are then grouped in blocks that cannot be altered, bringing strengthened trust and transparency, and a new nexus for value exchange.

DTCC intends to replace its existing Trade Information Warehouse with a new solution based on Distributed Ledger Technology / Blockchain to reduce costs and pave the way for driving further efficiencies for member banks. This has the potential to further streamline and automate the derivatives process across the industry by eliminating the need for disjointed and redundant processing and reconciliation – all of which would drastically reduce cost across the entire ecosystem.

How will it work?

The existing Trade Information Warehouse currently houses the golden copy for all credit derivatives transactions and is responsible for critical post-trade functions including payment calculations and credit event processing.

By replacing the decade-old Trade Information Warehouse platform with new Distributed Ledger Technology, DTCC will create a robust resilient solution that guarantees identical copies of data across multiple nodes with inherent disaster recovery and continuous availability.

All industry participants will have access to data on the distributed ledger, eliminating the need for reconciliation and potentially helping to simplify regulatory reporting in the future.

It will also provide a simple and easy to operate solution for both business users and supporting technology teams, with minimal impact to external industry participants – reducing infrastructure cost, enhancing operational controls and paving the way for adding more asset classes and functions, resulting in enhanced value to member banks and the potential to enable direct participation of regulators in future.

Plus, in addition to the standard corporate security provisions, new Distributed Ledger Technologies have additional security measures through advanced cryptography – a hallmark of blockchain solutions.

The combined expertise of IBM and our partners enables us to provide DTCC with this resilient, open and innovative new technology platform to support this transformative initiative.

For enterprises collaborating across multiple organizational silos – and wherever there are documents or transactions that are required to be confirmed, settled, exchanged, signed or validated, organizations can unlock substantial economic value using blockchain technology.

Learn about IBM Blockchain and how blockchain networks will alter the future of business [link].

General Manager, Strategy & Market Development, IBM

More stories

How Data and Analytics Can Power a Transformation in Long-Term Disability

Employer-provided disability insurance has a problem — it’s reactive, risk-based payout, and in its current state, it cannot affect the metrics employers and employees truly care about: employee engagement, productivity and wellness. Modern disability insurance first became available in the late 19th century and was called “accident insurance.” It was meant to protect workers in […]

Continue reading

Bringing Blockchain to Healthcare for a New View on Data

In a complex health system, seamless transitions in care are dependent upon, and often hindered by, the ability to access and share patient data. In a new proof of concept at Canada’s University Health Network (UHN), blockchain is being used to create a new model in which health data can be rapidly unlocked by authorized […]

Continue reading

Bringing AI and Blockchain to Bear on Environmental Challenges

IBM began focusing on environmental sustainability before the first Earth Day was ever celebrated. Addressing environmental challenges requires sustained action because even as we make progress, new challenges emerge. The digital transformation of our business and our clients’ businesses is improving the degree to which we can both examine and address global environmental challenges. Today, […]

Continue reading