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The technology and consulting multinational giant IBM and the French bank Credit Mutuel Arkea announced they have successfully completed a project to improve the bank’s ability to verify customer identity, using the blockchain technology.
The project is based on the open-source Hyperledger Project software, which reinforces consistency, traceability and privacy of the information. Besides using it for its own purposes, the bank could offer its clients to use the system for proving their identity to third parties, such as local utility providers and retailers. If the project evolves from a proof of concept to reality, that is.
“The project helped us to understand and master blockchain for other client uses. Now, we are ready to incorporate this technology in our ecosystem,” said Frederic Laurent, COO Innovation & Operations, Credit Mutuel Arkea. In his words, the project is the first of its kind in France and offers a complete view of customers’ documents across the bank’s distributed network.
The blockchain technology is a type of distributed ledger system (DLT), mostly used for generating and recording transactions with cryptocurrencies such as bitcoin. It, however, can be applied to public online ledgers seen as a cheaper, more transparent, secure and efficient alternative to the current global financial system and in many other industries, such as healthcare. Banks could use the technologies to better track the movement of funds and countering money laundering.
Credit Mutuel Arkea has 3.6 million customers across France and, according to Laurent, the implementation of the blockchain technology would simplify the administrative processes.
This bank is not the first in France to test the blockchain technology for its own use. Last week BNP Paribas and Caisse des Depots announced they are working on a post-trade blockchain platform aimed at small businesses.
Earlier this year the Bank of Canada said it was also testing the blockchain technology, while the British branch of the Spanish bank Santander, Santander UK, announced it has successfully tested real-time payments via the DLT. The central bank of Russia, which otherwise has a staunch position against bitcoin and other cryptocurrencies, has set up a working group to look into the blockchain and its possible implementation.