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11th August 2017
KBank and IBM develop blockchain-based Letter of Guarantee service
IBM and Thailand’s Kasikornbank (KBank) are to launch a new enterprise Letter of Guarantee network based on IBM Blockchain. The new solution is designed to help simplify and expedite procedures for KBank’s Letter of Guarantee process, with the goal of improving the customer experience, strengthening security and reducing costs for clients and the bank.
With a more digitised, streamlined and transparent process enabled by blockchain, KBank’s enterprise Letter of Guarantee solution is completely paperless, allowing banks and customers to do with the click of a button what previously required paperwork. The transparency provided by blockchain can help eliminate forgery and provide efficient service delivery. The solution is designed so that a Letter of Guarantee process that previously took up to several days is now significantly shortened.
Letters of Guarantee issued via the commercial banking system in Thailand are expected to reach over $40bn, increasing by 8 per cent in 2017. Of that total, approximately $9bn will be issued by KBank, a 25 per cent market share. KBank is targeting an increase in Letter of Guarantee issuance via electronic channel to 35 per cent by the 2018 year-end, 5 per cent of which will be processed via the blockchain.
“Blockchain technology is applied to create highly secure networks of document filing and retrieval,” said Pipit Aneaknithi, president of KBank. “As Thailand’s largest issuer of Letters of Guarantee, KBank is working with IBM to implement this innovative technology to further define and articulate our leadership in this market.”
Parnsiree Amatayakul, managing director of IBM Thailand, said: “Blockchain reduces traditional transaction barriers and can help to improve business processes in the financial services sector and beyond. As IBM continues to support KBank’s important initiatives in blockchain, the value this technology can bring to the bank and its clients is becoming increasingly clear, and can redefine the way businesses in the region operate and grow.”