Financial services firm JPMorgan Chase is seeking to expand its blockchain solution to help reduce the number of global payments rejected by errors.
Called Interbank Information Network (IIN), the blockchain solution is a shared ledger for cross-border payments built using JPMorgan’s blockchain platform, Quorom. First tested in 2017, IIN allows member banks to exchange information in real-time as a way to verify that a payment has been approved. IIN is currently being used by more than 220 banks around the world.
In an interview with the Financial Times, John Hunter, JPMorgan’s head of global clearing, said that they are considering expanding IIN’s functions by adding a new feature that can instantly verify whether a payment is heading to a valid bank account. According to Hunter, in the current process, it takes days to reject a payment due to an error in the account number, sort code, address or other details.
“Banks straight through processing rates are in the mid-80s to mid-90s,” Hunter said. “It’s that gap — the 5 to 20 percent of payments — that have to be assessed by operations where we’re trying to alleviate some of that pain.”
The new feature is expected to go live by the fall for both domestic and international payments. The bank believes that the new feature will be especially useful for international payments, which experience higher error rates.
The bank is also planning to setup a sandbox so that FinTechs can use the IIN network to “develop and put out applications.” The sandbox, which is also expected to launch in the third quarter, will reportedly offer developers building blocks such as secure messaging, document file transfer and data modelling.
“This removes many challenges and hurdles — tooling, ecosystem, data, environment, etc,” said Hunter. “Developers only need to bring their intellect.”
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