Barclays and Citigroup among big finance players trying IBM’s blockchain ‘App Store’

A select group of financial institutions are reportedly testing the IBM-conceived LedgerConnect blockchain-based platform, built upon HyperLedger Fabric. 

The repository, created in collaboration between Big Blue and CLS – an infrastructure provider that offers settlement, processing, and data solutions – will service an ecosystem for financial institutions, financial technology and software providers to distribute dApps which operate on a common secured distributed ledger.

According to the CLS press release, there are nine financial institutions participating in proof of concept testing for LedgerConnect. The system will initially offer access to code designed to service areas such as know your customer processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation, and market data. According to its creators, thetranche of dApps allow businesses to “focus on business objectives rather than application development, enabling them to realise operational efficiencies and cost savings across asset classes” and benefit from “a single, shared version of events and one implementation of common business functions.”

Initial vendors on LedgerConnect, which – as the name suggests – operates around the open source HyperLedger Fabric – include Baton Systems, Calypso, Copp Clark, MPhasis, OpenRisk, SynSwap, Persistent Systems and IBM itself. They will provide off-the-peg software solutions for the restricted access blockchain that could be cost-prohibitive should potential customers all seek to create bespoke options of their own. Sharing the same platform also offers the potential to avoid the range of  interoperability problems such separate systems could create.

Commenting on LedgerConnect, Alan Marquard, Chief Strategy and Development Officer, CLS said, “LedgerConnect is part of CLS’s strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets. We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks.”

“Together IBM and CLS have been early pioneers in advancing blockchain solutions for the financial services space,” said Marie Wieck, general manager, IBM Blockchain. “Building on the success of CLSNet and leveraging the strong relationship CLS has with the world’s leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry, which will accelerate innovation across the ecosystem with value added services for blockchain networks.”

When the proof-of-concept trial is complete, CLS and IBM will further gauge demand for their innovation, before seeking regulatory approval and eventually rolling the product out to the wider financial sector.