Italian banks adopt blockchain technology for reconciliations
The Italian Banking Association have announced the country’s banks would soon adopt blockchain technology to run reconciliations. This initiative is due for implementation in March 2020. This comes after the Italian House of Representatives approved a bill defining distributed ledger technologies (DLT) and blockchain.
Adopting DLT for bank reconciliations is part of the Spunta Project. This project outlines a set of activities to reconcile. The Italian banks and ABI Lab worked on the Spunta project with the key objective of simplifying and standardizing bank reconciliation processes.
The basics of the new operation include reducing the period of reconciliations from a monthly basis to a daily process thus promoting efficiency. The DLT platform will share the rules for checking the movements symmetrically between the participating banks. Finally, the platform will allow for integrated management of communications and processes in the event of an imbalance.
Incorporating DLT in the Italian banking industry will seek to promote better visibility of transactions between banks. To meet this objective, ABI Lab is working with some technical partners including NTT Data, a Japanese IT giant, Sia, an Italian decentralized cloud storage platform, and Corda di R3.
The decision to implement DLT comes after the ABI’s latest survey that focused on the use of IT in Italy’s banking sector. The survey showed that there was an increase in IT investments in 2018 by 5.7% continuing a growth trend since 2014.
The 14th ABI Lab report confirmed the central role attributed to technology and the constant drive for innovation in the Italian banking sector. In addition, 88.5% of the companies that participated in the survey indicated that they increased their ICT budget for 2019 as compared to the 2018 budget. Adopting IT in the banking industry aims at promoting mobile banking services, upgrading infrastructure, enhancing data governance initiatives, and mitigating cyber risk.
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