Blockchain would be the Cross-Border Payments. By adopting

Blockchain technology
lets multiple parties have real-time access to a constantly updated digital
ledger that can’t be altered. some of the areas that will see effects with the
utilization of blockchain would be in Clearing and settlement, Trade finance
and so on. One of the developments in the banking sector in Singapore, with the
use of blockchain, would be the Cross-Border Payments. By adopting the
blockchain technology it brings about safer, quicker, cheaper and more
transparent payments.

 

The first bank in Southeast
Asia in using blockchain technology is OCBC Bank which they use blockchain
technology in its local and cross-border payment funds transfer services. OCBC
Bank has adopted a blockchain technology permitting local and cross-border inter-bank
fund transfers. A payment blockchain solution collectively designed by OCBC
Bank and a local banking payment solutions company, BCS information Systems
(BCSIS). With the BCSIS blockchain platform, it allows inter-bank payments
between banks in Singapore and overseas while not requiring a payment
intermediary. As such, generally a cross-border funds transfer between OCBC Malaysia
and OCBC Bank Singapore takes up to one day currently it may be completed in
less than five minutes. some of the advantages for OCBC Bank for adopting the
payment blockchain solution would be safer, quicker turnaround time, more
transparency and lower cost

 

With the BCSIS
blockchain platform the removal of the traditional intermediary transaction
platform, there’s a visibility of transaction flows between senders and
recipients and therefore the dealing is far more easily tracked

While SCB
adopted cross-border payment services for the corporates in both Singapore and
India by using the enterprise Blockchain platform from the FinTech start-up,
Ripple. Ripple’s distributed ledger technology (DLT) solution. SCB and Axis
Bank (India) uses the RippleNet as a passage through the “$15 billion trade
corridor” between Singapore and India. A typical cross-border funds transfer
would take up to two business day, whereas with Ripple’s enterprise blockchain
solution, making a cross-border payment which is able to be completed in less
than ten seconds with full transparency of fees and FX. When fully
commercialised, businesses are going to be able to have access and make
cross-border payments in real time, at any time of the day while not being
restricted by cut-off times. additionally, fee & FX transparency in
conjunction with real-time status updates can give businesses greater control
and certainty on their payments, costs and also the use of funds.

Ripple’s
blockchain platform reduces the amount of your time and money related to
sending payments across the border which provides real-time,
business-to-business (B2B) international payments. Additionally, with the
Ripple-powered corporate payment service, it permits SCB to offer their
customers an enhanced payment experience, and enabling their end-customers to
manage their cash flow, costs, and float better

 

There are
several large international corporates with regional treasury hubs in
Singapore, these corporates span industries together with fast-moving consumer
goods (FMCG) and retail. Typically, these corporates manufacture their product
in India before shipping them to Singapore for worldwide distribution.
Singapore-India trade corridor is worth $15 billion, with the Ripple-enabled
cross-border payment it helps to unlock the corridor on both sides for SCB and
Axis Bank.

With the increase in uses of blockchain
technology in banks, it might probably disrupt the financial industry. Thus,
regulatory issues and impacts might arise. Regulators can ought to raise the
standards in cybersecurity to make sure the safety of data by reviewing the
technology risk management guidelines. Whereas the impacts would be fraud
reduction, eliminate intermediaries in the payment processing system, keeping
up with Know Your Customer (KYC) and having smart contracts. With DLTs
organizations that are using a similar DLTs would be able to access and share
structured information across a distributed network using advanced
cryptography, as such different organization do not have to start a KYC process
again which reduces the administrative costs. As for good contracts, with the
use of blockchain, codes will be programmed to form contracts between financial
organization once a certain set of criteria has been achieved. two or more
parties then will enter their keys to decrypt the contracts.