ANZ and Westpac have joined up with IBM and shopping centre operator Scentre Group to digitise the bank guarantee process for commercial property leasing, using blockchain, or Distributed Ledger Technology (DLT), instead of paper documents.
In the commercial property space, bank guarantees are used by prospective tenants to secure leases rather than a cash deposit or rental bond. According to a whitepaper documenting the trial, these are a number of challenges that arise through this process being paper-based.
These include the costs, risks, and delays associated with physical document management; difficulties in tracking and reporting a guarantee’s status as it goes through multiple handoffs and changes; and lack of standardisation, or the effort required to review and negotiate the terms and conditions of a guarantee, which can vary by bank and landlord.
It was determined that a blockchain solution could facilitate the necessary flow of information while also balancing the need for transparency and confidentiality.
Mark Bloom, CFO at Scentre Group, which owns almost 60 Westfield shopping centres, said that an update of the decades-old process for issuing, tracking, and claiming on guarantees is long overdue. Read more
Gina Baldassare – Startup Daily – 10 July 2017