Union Bank of the Philippines has been included to a blockchain group led by J.P. Morgan that seeks to minimize the process of cross-border payments.
This article is first published on September 27, 2018. Kindly provide attribution if you will source our article.
The Interbank Information Network (IIN) is launched in 2017 to allow payments to reach the recipient faster. Since IIN is using blockchain technology, the number of participants, particularly the middleman in the transfer, will either be removed or reduced as blockchain allows the transfer of money from the sender to the receiver with fewer steps. Blockchain allows banks to reduce the time being spent by banks in responding to compliance and other forms of verification.
IIN is powered by a permissioned version of the ethereum blockchain called “Quorum”.
The pilot clients of IIN include the Royal Bank of Canada & the Australia and New Zealand Banking Group Limited. Today, there are 76 banks that are part of IIN. “We believe IIN will significantly improve the efficiency of cross-border payments, particularly as more banks participate and we evolve the functionality and use cases beyond compliance-related inquiries,” said Ms. Emma Loftus, the Head of Global Payments and Receivables at J.P. Morgan Treasury Services.
Of the 76 banks, 21 are from Asia and the Pacific. Joining Union Bank are Sumitomo Mitsui Banking Corporation, Mizuho Bank, Kasikorbank, China CITIC, and Vietnam Joint Stock Commercial Bank for Industry and Trade as stated on the company’s website.
Union Bank has been in the news lately for its blockchain initiatives. Its flagship initiative – Project i2i – a blockchain-based transaction and payment system that aims to connect rural banks into the country’s main financial network. Union Bank thinks Project i2i can serve as a catalyst to inclusive prosperity for 35 million unbanked in the country. The last report revealed that the bank planned at least 100 Rural Banks aboard the blockchain project.
With developments into blockchain and artificial intelligence (AI), many have wondered if these technologies will mean lesser jobs for people. To which CEO Edwin Bautista assured that the bank is not getting rid of jobs, but only old processes. It was later announced that Union Bank plans to add 20,000 programmers to the company in the next few years.
Becoming part of the Interbank Information Network means Union Bank is now part of an expanded network that facilitates cross-border payments across the major markets including North America and Europe.