Santander aiming to use blockchain technology

Written by on May 27, 2016 in News with 0 Comments
 REUTERS/Toby Melville

REUTERS/Toby Melville

LONDON (Reuters) – Santander is the first British bank to start using the technology behind virtual currency Bitcoin for recording international payments, and may start rolling out the service to customers next year, the head of innovation at its UK arm said. Blockchain, or distributed ledger technology, creates a shared database in which participants can trace every transaction ever conducted. Its proponents say it has the potential to shake up how financial markets operate.

Santander said about 6,000 staff in Britain would be eligible to begin using the technology internally in a pilot program that aims to make the transfer of money faster, more accurate and more transparent. The technology may eventually allow banks to settle the estimated annual $26 trillion of international transactions almost instantaneously. That compares with settlement times of days under the current systems used by banks.

“The main customer benefits are certainty of timing, so you know when the payment is going to arrive and certainty of value,” said Ed Metzger, head of innovation, technology and operations at Santander UK.

Metzger said at the moment when customers transfer money overseas the charges between banks and delivery times are estimates, whereas with this technology when a customer hits send that will be the amount that reaches the recipient account.

Blockchain is part of the growing financial technology sector being encouraged by Britain to keep the country’s financial sector competitive with New York and Singapore.

Santander and other banks such as Citi, BNP Paribas and Goldman Sachs are investing in the sector to avoid being left behind by start-ups racing to apply blockchain in payments, and clearing and settlement of trades.

Santander’s pilot, however, underscores how the speed that blockchain could offer is shackled by being slotted into slower, legacy payments systems.

Metzger said unless all the banks are using the same technology then the “last mile” of its pilot using blockchain will use slower, existing payments links.

In March, broker ICAP said it was the first to distribute data on trades to customers using blockchain.

(By Andrew MacAskill and Huw Jones; Editing by Mark Potter)


About the Author

About the Author: Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on, video, mobile, and interactive television platforms. .


If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: