RBS and Barclays trial blockchain for property
Written by Hannah McGrath
RBS and Barclays have participated in a global trial of blockchain technology which claims to be able to cut the buy-sell period from three months to less than three weeks.
The lenders joined 40 global financial and professional services firms, including Swiss Re, AXA and Clifford Chance, to test the application of distributed ledger technology (DLT) developed by Instant Property Network (IPN), a property transaction network.
The trial, which was also facilitated by enterprise blockchain software firm R3, ran end-to-end transactions using test data through a new distributed ledger to simulate property sales over a five-day period.
It is estimated that if these efficiencies were applied to the global property market it could equate to an annual saving of approximately $160 billion, according to IPN.
The company said the positive results of the trial signal that tokenisation could fundamentally change property market transactions in the coming years.
The trial enabled firms to move property transactions from paper and email-based systems to a single digital platform which uses DLT to form an immutable trail of transactions. The blockchain platform also allows companies to transact directly while keeping data stored in their own systems, without the need to transfer data onto IPN’s platform.
Dan Salmons, director for mortgage innovation at RBS, said: “We see real potential for blockchain to transform the process, and so have been delighted to take part in the innovative IPN trial.
“As a result we can see the potential for a network of this kind to improve transparency and speed for customers, and reduce cost and complexity for all involved,” he continued, adding: “IPN has given us our best view yet of what a future end-to-end journey could look like.”
David E. Rutter, chief executive of blockchain firm R3, said there had been plenty of hype but little in the way of tangible results proving the ways in which distributed ledger technology could drive changes in the property industry.
“This trial changes that,” he said. “Not only has it shown that distributed applications work and the benefits are real and substantial, it has also shown that there is huge appetite in the market to evaluate it.”