SWIFT's New Blockchain System to Complete WIth JPMorgan's
A new pilot of the blockchain system developed by SWIFT aims to reduce the error rate of bank transactions.
Cryptocurrencies may not be faring well at this moment, but the blockchain scene is as strong as ever, with major banking organizations developing the technology for their own benefit. SWIFT just came out with something it’s piloting that it hopes would supplant current banking models, according to Verdict.
The organization’s aim at this moment is to address problems that come as a result of banking errors. When a customer wires money, there’s always a chance that the transfer will contain an erroneous destination account or other invalid data that makes it difficult or impossible to process the request.
This oftentimes leads to payments being refunded to the sender after the sending bank attempts to process them. The refunding itself may also take some time, creating situations where customers would wait several days before they can retry sending the money correctly.
SWIFT found that almost 10% of payments sent via its own platform experienced these types of delays.
“We know that there are still some payments which are badly formatted and missing some information. Instead of correcting that later in the chain and delaying payment, we are trying to anticipate as many of those issues as possible (with prevalidation) so payments can be processed faster,” SWIFT CMO Luc Meurant said.
SWIFT’s solution is similar to JPMorgan Chase’s Interbank Information Network (IIN), a blockchain-based project with the aim to pick up the pace of international settlements.
Piloted nearly a month ago, the IIN was last reported to be scaling to fit its needs as expected, with JPMorgan anticipating an effective transaction volume of 300,000 per 24 hours.
Expectations may be higher for SWIFT, which currently handles 14.5 million cross-border settlements per day. If its blockchain project has about as much kick as the current system, it would be a juggernaut that would give IIN a run for its money.