Blockchain technologylets multiple parties have real-time access to a constantly updated digitalledger that can’t be altered. some of the areas that will see effects with theutilization of blockchain would be in Clearing and settlement, Trade financeand so on. One of the developments in the banking sector in Singapore, with theuse of blockchain, would be the Cross-Border Payments. By adopting theblockchain technology it brings about safer, quicker, cheaper and moretransparent payments. The first bank in SoutheastAsia in using blockchain technology is OCBC Bank which they use blockchaintechnology in its local and cross-border payment funds transfer services.
OCBCBank adopted a blockchain technology permitting local and cross-border inter-bankfund transfers. A payment blockchain solution collectively designed by OCBCBank and a local banking payment solutions company, BCS information Systems(BCSIS). With the BCSIS blockchain platform, it allows inter-bank paymentsbetween banks in Singapore and overseas while not requiring a paymentintermediary. As such, generally a cross-border funds transfer between OCBC Malaysiaand OCBC Bank Singapore takes up to one day currently it may be completed inless than five minutes. some of the advantages for OCBC Bank for adopting thepayment blockchain solution would be safer, quicker turnaround time, moretransparency and lower cost With the BCSISblockchain platform the removal of the traditional intermediary transactionplatform, there’s a visibility of transaction flows between senders andrecipients and therefore the dealing is far more easily tracked While SCBadopted cross-border payment services for the corporates in both Singapore andIndia by using the enterprise Blockchain platform from the FinTech start-up,Ripple. Ripple’s distributed ledger technology (DLT) solution. SCB and AxisBank (India) uses the RippleNet as a passage through the “$15 billion tradecorridor” between Singapore and India.
A typical cross-border funds transferwould take up to two business day, whereas with Ripple’s enterprise blockchainsolution, making a cross-border payment which is able to be completed in lessthan ten seconds with full transparency of fees and FX. When fullycommercialised, businesses are going to be able to have access and makecross-border payments in real time, at any time of the day while not beingrestricted by cut-off times. additionally, fee & FX transparency inconjunction with real-time status updates can give businesses greater controland certainty on their payments, costs and also the use of funds.
Ripple’sblockchain platform reduces the amount of your time and money related tosending payments across the border which provides real-time,business-to-business (B2B) international payments. Additionally, with theRipple-powered corporate payment service, it permits SCB to offer theircustomers an enhanced payment experience, and enabling their end-customers tomanage their cash flow, costs, and float better There areseveral large international corporates with regional treasury hubs inSingapore, these corporates span industries together with fast-moving consumergoods (FMCG) and retail. Typically, these corporates manufacture their productin India before shipping them to Singapore for worldwide distribution.Singapore-India trade corridor is worth $15 billion, with the Ripple-enabledcross-border payment it helps to unlock the corridor on both sides for SCB andAxis Bank. With the increase in uses of blockchaintechnology in banks, it might probably disrupt the financial industry.
Thus,regulatory issues and impacts might arise. Regulators can raise the standardsin cybersecurity to make sure the safety of data by reviewing the technologyrisk management guidelines. Whereas the impacts would be fraud reduction,eliminate intermediaries in the payment processing system, keeping up with KnowYour Customer (KYC) and having smart contracts. With DLTs organizations thatare using a similar DLTs would be able to access and share structuredinformation across a distributed network using advanced cryptography, as suchdifferent organization do not have to start a KYC process again which reducesthe administrative costs.
As for good contracts, with the use of blockchain,codes will be programmed to form contracts between financial organization oncea certain set of criteria has been achieved. two or more parties then willenter their keys to decrypt the contracts.