SWIFT’s blockchain tests: what have we learned? – Deutsche Bank

June 2018

Banking Technology recently interviewed Andreas Hauser about Deutsche Bank’s learnings from SWIFT’s recently completed landmark proof of concept for nostro reconciliation using DLT

The global financial messaging provider, SWIFT, recently embarked on a ground-breaking proof of concept (PoC) exploring the application of distributed ledger technology (DLT) for nostro reconciliation. Working with 34 financial institutions, including Deutsche Bank, SWIFT’s project investigated whether DLT applications could help to improve real-time liquidity monitoring and reconciliation. Commenting on the PoC, Andreas Hauser, Senior Business Product Manager for Intraday Liquidity Management, Cash Management, Deutsche Bank told Banking Technology that results were promising but we found some surprises about the use of this technology and existing proprietary systems using APIs for the same purpose.

What were the results?

The results were clear: DLT can indeed help to deliver real-time liquidity monitoring and reconciliation, as expected. That said, they also showed that the effective application of blockchain technologies is largely dependent on a bank’s existing system infrastructure and business models. In short, leveraging DLT for these purposes requires greater sophistication than a “one size fits all” approach.
Andreas Hauser

What surprised us?

At Deutsche Bank, meanwhile, we drew additional conclusions. Surprisingly, we found that improvements to nostro real-time liquidity monitoring and reconciliation processes isn’t the blockchain technology itself. In fact, connecting proprietary systems via application programming interfaces (APIs) can produce similar outcomes. Further, we discovered the value that data-rich messaging standards, such as ISO 20022, can provide in creating a more harmonious payment environment.

Our conclusions

To mark the conclusion of SWIFT’s sandbox, Hauser shared with Banking Technology that: “Although DLT shows promise, unanswered questions – as well as challenges to adoption – remain. So it is still early days for DLT to be considered mature enough as a basis for a global mission critical financial infrastructure.”

Yet all is not lost.

“The clearest benefits,” he concludes, “are expected for financial institutions – typically medium-sized, regional banks or investment firms – with a higher dependency on nostro services.”

Read the Banking Technology article here.

Andreas Hauser

Senior Business Product Manager for Intraday Liquidity Management, Cash Management | Deutsche Bank

Andreas Hauser

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