Advancements in blockchain technology are proving beneficial in the financial industry. The most recent progress is the introduction of the Finledger blockchain platform, which allows processing of promissory note loans.
According to a news release dated May 21, this new application for this type of legal binding loan agreement will be very beneficial to the entire financial industry. The test stage involved four banks, DekaBank, dwpbank, DZ Bank, and Heleba, which used Finledger technology to complete note transactions. Reportedly, the platform can reduce the processes involved when issuing such notes by more than 50%.
Marion Spielmann, Head of Banking & Depositary at DekaBank, said:
“The opportunities offered by using a blockchain take the product promissory note loan to a whole new level. Together with the other institutes, we have now successfully implemented a digitization project that allows our customers and us to handle the underlying processes completely on a platform-based basis. This is a perfect example of how digitization can increase efficiencies across entire process chains while improving the attractiveness of a product.”
The Finledger blockchain platform will help reduce the risk associated with lending processes for banks. It also eliminates the need for lenders to request and hold documents from borrowers. Additionally, borrowers will not have to part with their valuables or assets during the transaction process. Finally, it will increase security and transparency by recording every transaction on the blockchain.
Peter Tenbohlen, head of operations at DZ Bank, affirms that trading transactions are now fully automated thanks to the progression of digitization. They will be able to meet the demand for digital services as requested by customers. He stated:
“As digitization has progressed, our customers’ demand for digital services has increased significantly. Thanks to the bundled expertise of four banks, we are now presenting a new platform through which trading transactions can be processed fully automatically.”
Reportedly, there are plans to roll out Finledger to other industries. The pilot business is the first step that will be followed by a second phase before going live.
Blockchain technology is taking root in the finical world. Recently, three global banks joined the Finastra R3 Cordablockchain-based syndicated loans platform, which uses blockchain to enable instant sharing of records between financial institutions.
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