Whitechapel Think Tank outlines blockchain efficiency potential
A report from the Whitechapel Think Tank indicates that Distributed Ledger Technology (DLT) has the potential to grease a number of operational wheels with UK payment systems, including reference data, identity management, settlement and internal bank processes. WTT says that the banking industry should investigate the use of DLT in the UK’s Extended Industry Sort Code Database, and a central sanctions database, noting that the flagging of financial crime intelligence sharing is currently a problem.

Distributed ledger technology has the potential to ease a host of operational pain points with UK payment systems and could be particularly useful for reference data databases, a report from Whitechapel Think Tank (WTT) suggests.

The report finds that DLT can transform the efficiency of specific operational pain points within payment processing, with each of the most applicable use cases falling within one of four categories: reference data, identity management, settlement and internal bank processes.On reference data, WTT says the industry should investigate the use of DLT in two specific areas: the UK's Extended Industry Sort Code Database payments reference data database, and a central sanctions register database.Meanwhile, the report notes the UK's Payment Strategy Forum's flagging of financial crime intelligence sharing and KYC verification as problematic areas. A permissioned distributed ledger could, it is suggested, be a good way to produce and maintain blacklists for AML obligations.Market settlement is listed as “one of the most documented applications in DLT,” and correspondent banking is highlighted as a particular area for improving settlement. While for internal bank processes, DLT is floated as a way that banks can link all applications so that they and their customers can track payment status in real time.Read the full report here: