Kasikorn Bank says that by 2018 it wants to process at least one-in-twenty electronic Letters of Guarantee in its corporate credit business over a new distributed ledger platform developed in concert with IBM
The bank began working with IBM in November last year to create a blockchain business network which will allow credit requestors, credit beneficiaries and KBank to fast-track traditionally lengthy procedures such as Letters of Guarantee for clients.
Built on Hyperledger Fabric, the platform hass been tested in the Bank of Thailand’s regulatory sandbox and built to be able to scale up to meet an expected increase in Letters of Guarantee issuance through electronic channels.
Letters of Guarantee issued via the commercial banking system in Thailand are expected to reach over $40 billion, increasing by eight percent in 2017. Of that total, approximately $9 billion will be issued by KBank, which has the largest share of the market at 25%.
Pipit Aneaknithi, president of KBank says it is targeting an increase in Letter of Guarantee issuance via electronic channel to 35% by the 2018 year-end, five percent of which will be processed via the blockchain.
He adds that the bank aims to bring other banks onboard to participate in the shared ledger framework.