Deutsche Bank has joined the JPMorgan Chase-led Interbank Information Network (IIN), one of the financial services industry’s largest blockchain projects, according to a report from the Financial Times.
By joining INN, the German lender is now part of a network of 320 banks which swap information on global payments over blockchain, with the goal to allow payments that aren’t subject to costly delays that affect around 1.5 percent of cross-border payments.
In order to achieve this, the participating banks in INN make information about the transfers instantly accessible to all banks in the payments chain. The banks part of INN use JPMorgan as a correspondent bank to process dollar payments for their clients. Deutsche Bank, on the other hand, is the largest clearer of euro-denominated payments in the world.
Deutsche Bank focuses on transaction banking
By joining INN, Deutsche Bank will be able to provide better services to its clients as well as lower the cost of processing difficult payments, according to Ole Matthiessen, the head of Deutsche’s cash management division, who spoke to the news outlet.
This would be a welcome boost to the troubled bank, as its transaction banking, including cash management, is one of the only divisions that are still strong on a global scale.
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“Our competitors are not just the other banks, it’s also new players in the market, we need to become efficient enough to provide seamless real time and digital process,” Matthiessen said.
“It [joining IIN] is definitely directionally a very important step for us because it will help drive [customer] satisfaction.”
With Deutsche Bank joining INN, the JPMorgan-led network also benefits. That’s according to Takis Georgakopoulos, head of payments at JPMorgan.
“A network that only has JPMorgan’s clients will have very big natural limitations. It would mean that all of these other smaller banks would still need to have bifurcated procedures, what they do with JPMorgan and what they do with other banks would still have to be different,” added Georgakopoulos.
“Having Deutsche join — and hopefully Deutsche will be the first of several other large banks — is going to help us drive towards ubiquity and ubiquity is a pre-requisite for the success of the network.”
At present INN consists of 320 members, with 65 having gone live on the system and 255 have signed letters of intent. By the end of the year, INN is expected to reach its target of 400 agreements, according to Georgakopoulos.