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Wednesday 21 March 2018


SWIFT publishes blockchain PoC findings

Written by Chris Lemmon

SWIFT has published a report on the proof of concept (PoC) for real-time Nostro reconciliation using a distributed ledger technology (DLT) sandbox with 33 global transaction banks.

The PoC is testing whether DLT can help banks reconcile Nostro accounts more efficiently and in real-time, while lowering costs and operational risk. The report provides an overview of the PoC to date, including technical objectives, early findings on the potential business benefits, as well as key challenges that still need to be addressed to achieve industry-wide adoption.

Under the current correspondent banking model, banks need to monitor the funds in their overseas accounts via debit and credit updates and end-of-day statements. The maintenance and operational work involved represents a significant portion of the cost of making cross-border payments.

Preliminary results of the PoC show that the SWIFT-developed DLT application can deliver the business functionalities and data richness required to support real-time liquidity monitoring and reconciliation. DLT provides real-time visibility to both the account owner and its servicer on the available and forecasted liquidity on the Nostro account and supports payment reconciliation and investigations by providing an enriched data model based on ISO 20022.

Wim Raymaekers, head of banking market and SWIFT gpi at SWIFT, commented: “The DLT PoC supports SWIFT’s goal of making cross-border payments more efficient – a mission we have championed through SWIFT gpi, which offers customers fast, transparent and traceable cross-border payments.”

Damien Vanderveken, head of research and development, SWIFTLab and user experience at SWIFT, added: “Preliminary results from the DLT PoC are positive for this use case. Significant progress has been made, but it is still early days for the latest generation of Blockchain technology, and it will take time before it is mature and scalable enough for mission critical applications.”

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