Australian FIs team up for Lygon blockchain pilot
ANZ, Commonwealth Bank, IBM, Scentre Group and Westpac, have jointly launched a live pilot for Lygon, a new digital platform using blockchain technology to change the management of bank guarantees that are often required as part of a retail property lease.
Historically, bank guarantees have been issued manually and on paper. Digitising this process reduces the risk of fraud for all parties involved, decreases the potential for errors and significantly increases the speed of execution.
The Lygon platform will be operated by Lygon 1B Pty, a company jointly owned by the five founding members.
Nigel Dobson, ANZ banking services lead, says: “This is a unique and transformational platform that enables the complete digitisation of bank guarantees. Retailers of all sizes with physical outlets will experience radically improved bank guarantee cycle times. Additionally, retail landlords will benefit from managing their outstanding guarantees in a secure, transparent and auditable manner.”
According to the involved firms, the Lygon platform has the potential to reduce the time it takes to issue a bank guarantee from up to a month to on, or around, the same day. Lygon has the potential to benefit many sectors and to reduce the risk of fraud across billions of dollars guaranteed by the banks.
The pilot will run for eight weeks with live data and transactions for a test group of retail property leasing customers from 3 July.
Didier Van Not, general manager corporate and institutional banking, Westpac adds: “This is a significant expansion of the proof of concept we conducted in 2017. We have created a blockchain-based platform to digitise the bank guarantee ecosystem. The pilot will test live transactions using distributed ledger to prove the technology is commercially viable.”
In subsequent phases, Lygon plans to expand the range of digitised bank guarantees that it supports across other industries as well as offering its services to other customers in the retail property sector.
The pilot will involve lease holders with retail outlets in some of Scentre Group’s Westfield living centres across Australia. After the pilot, Lygon intends to offer access to the platform to all issuers, applicants, and beneficiaries and support broader use cases over time.