The Union Bank of the Phillippines is helping regional banks to access the main banking network. The bank ran an “i2i” pilot project with seven rural banks.
The problem
There are roughly 400 rural banks with 2000 branches in the Philippines.
Rural banks are not members of the Philippine Clearing House or SWIFT, because both organizations have complex requirements. Interbank transactions with a rural bank can take from a day to a month to complete. And it can go through up to 25 processes via five departments.
Blockchain benefits
The blockchain project helped to reduce the 25 steps to three, and the turnaround to five minutes.
It also encouraged one of the banks, Cantilan, to migrate their core banking functions to the cloud.
Justo Ortiz, Chairman of the Board for UnionBank, said, “Rural banks are critical as they are embedded in remote communities.”
“Many people are still financially excluded, and we’re looking to change that.”
Solution
Union Bank adopted a permissioned version of Ethereum. They used the Kaleido platform which enables companies to launch Ethereum servers quickly. The software as a service platform is a little like Microsofts’s Azure workbench offering.
Kaleido launched last week and is available on the Amazon Web Services (AWS) marketplace.
