100 banks go live on Italian banking sector blockchain

  • Starting from March 1st, the Spunta infrastructure processed 204 million transactions related to the 55 banks migrated in the first two waves. By the end of the year, the number of processed transactions is expected to exceed 350 million.
  • If this application will be applied to more complex cases, working at its full capacity, it was estimated that the infrastructure would be able to manage a total volume of 8.4 billion transactions. As term of comparison, Bitcoin’s blockchain in the entire 2019 managed 117 million transactions.
  • The information matching algorithm has an automatic match rate of 97.6%

An Italian banking sector blockchain has become fully operational. Since October, around 100 banks have been operating on Spunta, the nodes network. The third wave of banks have entered into operation, using interconnected nodes in the bilateral accounts’ reconciliation.

Spunta Banca DLT (Distributed ledger technology), the project promoted by the Italian Banking Association (ABI) and coordinated by ABI Lab, is fully operational for the interbank reconciliation process. As of today, around 100 banks have access daily to their own nodes to manage this interbank process, which moved from a traditional slow and labor intensive exchange of telephone calls and messages to a solution that uses a frontier technology for the reconciliation of transactions.

Spunta, the banking industry blockchain in Italy, is being followed with great interest by other European banks. It is being studied to create an international working group to set out the requirements to match the characteristics of the ‘nostro’ (our money that is on deposit at your bank) and ‘vostro’ (your money that is on deposit at our bank) account processes across different countries and therefore to extend the application across the European banking sector.

There are many further usage potentials within Italy’s banking sector, as well as expanding the network of nodes to other industries in relationship with their banks. Spunta’s technical partners are NTT Data and SIA, in addition to R3 with the Corda Enterprise platform.

Interbank reconciliation

The new application verifies the matching of correspondent accounts that involve two different banks. The interbank reconciliation procedure in Italy is linked to processes traditionally carried out by the back office and are aimed at reconciling the transaction flows that generate accounting entries in the mutual accounts in Italy and at managing pending transactions.

Up to now, reconciliation was based on bilateral registers with a low level of standardization and operating processes that were not very advanced. The implementation of a blockchain-based process using Distributed Ledger Technology (DLT) for interbank reconciliations in Italy makes it possible to automatically detect non-matching transactions using a shared algorithm, standardizes both the process and the single communication channel, and provides a comprehensive view of the transactions among the interested parties.

As a consequence, the principles of the new Spunta envisage full visibility of the transactions and those of the counterparty; rapid management of the flows with daily, rather than monthly, reconciliations; shared rules for the symmetrical reconciliation of transactions between counterparty banks; and the integrated management of communications and processes in the event of an imbalance.

Read the full release

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