IBM and Major Financial Services Group Trials Blockchain with Barclays for New App Store

Partnering with IBM, CLS, a bank-owned major financial services group trials blockchain with Barclays, Citigroup and seven other financial institutions to launch a new blockchain “app store” for banks, ‘LedgerConnect’.

Utilising IBM’s blockchain platform and Hyperledger Fabric technology, the group is in the final stages of developing a proof of concept (PoC) to create a new ecosystem for banks connecting with fintech and software vendors for blockchain solutions.

Announced today, CLS highlighted that as banks increase their focus on blockchain for their operations, multiple systems performing the same business functions are being developed, creating siloed pockets of data that require expensive reconciliation processes.

LedgerConnect, operating on a private permissioned network, aims to solve this problem by providing a single, shared and secured enterprise-grade platform, on which multiple services can be deployed and consumed.  CLS stated:

“it can be cost prohibitive and time-consuming for each vendor, bank, or consortium to create and operate its own unique DLT infrastructure for multiple services when proven technology already exists.”

LedgerConnect aims to enable organisations to focus on business objectives, rather than application development, and is designed to meet the needs of regulated financial institutions and security conscious enterprises.

Dr. Lee Braine of the investment bank CTO office at Barclays, explained that there may be an option for a market infrastructure provider to accelerate the initial speed to market, by also hosting the banks blockchain nodes, he said:

“By participating in the LedgerConnect proof-of-concept, Barclays is gaining experience of a distributed ledger private network aimed at connecting both market infrastructure-hosted nodes and bank-hosted nodes.”

The nine participating financial institutions have selected services such as collateral management, derivatives post-trade processing and market data, provided by vendors including Baton Systems, Calypso, Copp Clark, MPhasis, OpenRisk, SynSwap, Persistent Systems and IBM itself.

Barclays is one of over 70 shareholders of CLS, that includes BBVA, HSBC, Royal Bank of Scotland, JPMorgan Chase, Goldman Sachs, ING and Bank of China.

Founded in 2002, CLS is the world’s leading provider of FX settlement services.  It’s main platform, built by IBM was an instant success.  A founding member of the Linux Foundations Hyperledger project, it has already launched CLSNet, a blockchain solution for FX trading, and will be one of the first applications available on LedgerConnect.

Marie Wieck, general manager at IBM Blockchain, said:

“Building on the success of CLSNet and leveraging the strong relationship CLS has with the world’s leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry”

Currently, all of the apps on LedgerConnect are Hyperledger-based, however the group said that they are open to other enterprise blockchain solutions making use of the app store.  Head of innovation and solution delivery at CLS, Ram Komarraju said:

“We are not averse to supporting other ledger implementations, whether it is R3’s Corda, whether it is Quorum (provided these techs are robust and can meet the needs we have from security perspective etc.),”.

On completion of the PoC and receipt of all necessary regulatory approvals, CLS and IBM plan to make the platform widely available to the financial industry.