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Blockchain integration at IBOS member bank Banco Santander.

Bank systems of today are extremely robust and secure, with security designed in. They sacrifice, however, flexibility and often user friendliness – especially when they must link with other technologies. On the other hand, banks like Banco Santander, have upgraded the API’s of core bank systems to be REST-compliant and/or support events and web sockets.

The integration of a distributed ledger technologies (DLT) platform with a core bank system should be relatively straightforward. DLT technology, network topology, architecture and security considerations remain a work in progress. For Banco Santander, the key is to minimise complexity.

John Whelan, Director of Banco Santander’s Blockchain Lab, commented:

“In the years ahead, we will move from a system of many banks with many ledgers (with all the associated reconciliation, central clearing parties, auditing, etc) to a simpler system of many banks but fewer ledgers where reconciliation is automatic. Central clearing parties may no longer be necessary and regulators will have a real-time view of the positions and risks across the industry. But this transition, if it finally happens, is going to take a long time, and the chief reason is simple: legacy bank infrastructure and the tens of billions of dollars that have already been spent on building that infrastructure.”

According to Whelan, the process starts by building a prototype to tackle a specific business problem on a particular DLT platform. It then builds a limited core bank simulator to emulate the core bank systems for that particular application.

Next, it maps out the process flow for the use case. After that comes a series of sprints over two to three months to produce an application robust enough to demonstrate to the bank’s business leaders. This may lead to to a pilot phase at Santander involving the Bank’s IT teams.

Read the full article in Enterprise Times here.