85% of Italian banks are now using R3’s Corda blockchain to make fast and secure interbank reconciliations and data transfers, Regulation Asia reported today. Many lenders under the Italian Banking Association (ABI) adopted the Corda-powered distributed ledger technology Spunta to optimize these processes and integrate the newly set standards.
Spunta is a blockchain-based application for interbank reconciliation that was originally designed by NTT Data, an information technology firm. After completing all technical tests at the end of last year, it is now operated by the cloud-storage company, SIA, to deliver fast and frictionless interbank data transfers.
According to the team, the integration of blockchain technology became viable after, in May 2019, the Italian Banking Association pressured an update onto The Interbank Agreement, a part of Italian law that governs interbank transfers and reconciliation. The law was first passed in 1978 and obliged banks to send physical tapes as part of the transfer process. Now, the agreement includes data standardizations, allowing banks to implement the latest blockchain technology and integrate the standard between March 1 and October 1, 2020.
With this, a total of 55 banks are now using Spunta to share reconciliation and interbank data. The organization expects that, if all goes well, by October there will be about 70 to 100 banks onboarded on the platform. ABI has endorsed Spunta as an innovative and secure way to transfer interbank data.
In regard to the newly-implemented changes, Silvia Attanasio, Head of Innovation at the Italian Banking Association, said:
“If we failed in this process, the worst thing that could happen was to have a problem in the information exchange between banks. Clients are not affected, the companies are not affected. It was a natural sandbox.”
Moreover, Demetrio Migliorati, head of blockchain at Banca Mediolanum, stated categorically that Corda’s technology has streamlined the process of interbank data transfer, as now the participating sides no longer need to use separate software. According to the latest information, some of the banks have also started using Spunta to transfer know-your-customer information (KYC) and guarantees of credit, broadening the functionality of the innovative blockchain solution.