HSBC finds blockchain drastically improves efficiency of internal payments
Having tested HSBC FX Everywhere on internal payments, the bank now aims to provide it as a platform service to clients.
HSBC announced on Monday that during the past year it has been orchestrating more and more cross-border payments between the various balance sheets within the federation of separately capitalized banks that make up the group using a new technology.
This has managed “to drastically increase the efficiency of these internal flows”, according to Richard Bibbey, interim global head of FX and commodities.
Like all banks, HSBC is looking to internalize more of its flows, reducing the volume of payments sent out through correspondent networks that it knows will only come back in through the bank again, and also reducing reliance on external settlement networks. Internal volumes are increasing.
However, an often overlooked problem is that error rates for internal payments are in line with external payments. And the success of JPMorgan’s Interbank Information Network shows how keen banks are to improve on this.
Having settled three million FX transactions, and made payments worth $250 billion using distributed ledger (the technology previously known as blockchain), HSBC is now taking to external clients – specifically multinational corporations with multiple treasury centres and cross-border supply chains – the solution it calls HSBC FX Everywhere.