Business banking giant ANZ in partnership with Westpac, IBM and shopping centre operator Scentre Group, has successfully completed blockchain trial to digitize bank guarantee process used for commercial property leasing.

The announcement stated that the pilot utilized blockchain technology in order to eliminate the need for current paper-based bank guarantee documents. This will thus result in single source of information with less potential for fraud and increased efficiency.

“We have been keen to avoid the hype surrounding blockchain and distributed ledger technologies, and instead focused on practical and deliverable use cases,” Nigel Dobson, General Manager Wholesale Digital, Digital Banking at ANZ said. “This proof of concept demonstrates how we can collaborate with our partners to develop a digital solution for customers, which also has the potential for industry-wide adoption.”

The blockchain trial used distributed ledger technology (DLT) that was powered by Hyperledger Fabric V1.0, which is a blockchain framework hosted by Linux Foundation.

The partners in the blockchain trial have released a whitepaper that details the process of solutions worked and that could be used in other situations that rely on bank guarantees. The trial will also address other inefficiencies in the current bank guarantee process that includes challenges in tracking and reporting of a guarantee’s status through multiple changes.

“This is about removing the cost of fraud, error and operational risk that will continue as long as bank guarantees remain paper-based and manually issued. Next steps involve encouraging all industry players to adopt this technology so we can better protect and save money for our customers. Beyond that there is no reason why this couldn’t be applied across other industries,” Andrew McDonald, General Manager Corporate and Institutional Banking at Westpac, stated.