July 4, 2019 / 1:02 AM / 16 days ago

Top Australian banks join IBM, Scentre in blockchain project

FILE PHOTO: The logo for IBM is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 27, 2018. REUTERS/Brendan McDermid

(Reuters) - Australia’s top three banks said on Thursday they have agreed to partner with IBM (IBM.N) and shopping mall owner Scentre Group (SCG.AX) to test blockchain technology to digitize bank guarantees.

The companies are exploring how to move away from paper-based bank guarantees to cut processing time and the risk of fraud, Australia and New Zealand Banking Group (ANZ.AX), Westpac Banking Corp (WBC.AX) and Commonwealth Bank of Australia (CBA.AX) said in a statement.

A new blockchain platform is being tested on a group of retail property leasing customers in an eight-week pilot program.

“While the pilot is focussed on retail property leasing, this technology has the potential to benefit many sectors and reduce the risk of fraud across billions of dollars guaranteed by the banks,” Didier Van Not, general manager corporate and institutional banking at Westpac, said in a statement.

Blockchain is an automated, computerized system to share, verify and permanently record data.

The technology behind cryptocurrencies, has been gaining traction among mainstream businesses. Facebook Inc (FB.O) plans to launch a new global cryptocurrency called Libra and Australian markets operator ASX Ltd (ASX.AX) is undertaking user development and testing.

Reporting by Niyati Shetty and Nikhil Nainan in Bengaluru; Editing by Stephen Coates

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