The four banks have established the first market standard for the digital execution of bonded loans and created an inter-company platform that allows them to address the needs of broad group of customers. Following the pilot phase, the solution will also be made available to other banks.
The blockchain-based platform finledger allows all stages of the issue process, including the confirmation of transactions and creation of certificates, to be executed digitally. In the future, finledger’s functions will also include the fully digital transfer and termination of bonded loans.
Compared to the existing multi-stage process, the finledger platform reduces the number of individual steps by more than 50 %, thereby simplifying and speeding up the highly manual and time-consuming execution process. As a result, it will no longer be necessary to physically store documents or send insured mail during the execution of bonded loan issues. Individual process stages can now be carried out in seconds using finledger.
The blockchain technology makes it possible to reduce process risks and costs. Automatic authenticity checks increase the security of transactions, and electronic signatures can be used to create certificates digitally. An overview of individual transactions and their current status is documented fully and presented transparently by the platform.
The blockchain process is based on the state-of-the-art Ethereum blockchain technology, which is particularly suited to a broad range of applications in the financial sector thanks to its smart contracts options.
The digitalisation of execution processes for bonded loan issues is the first stage in the blockchain project. The next step in the two-stage finledger go-live will involve further development of the blockchain, giving the first institutional investors access to the new solution. In the medium term, the platform will be made available to the whole banking sector and will provide a foundation for the digitalisation of further financial products with the help of blockchain technology and for the addition of new services.