Retail landlord Scentre Group has teamed up with a consortium of Australia-based financial services companies and IBM to launch a digital platform that puts retail lease bank guarantees on a private blockchain.
The new platform Lygon will collect and digitise data that are often required as part of a retail property lease from a test group of Scentre Group lease holders across Australia.
The shopping centre operator said this new, digital process increases transparency and security through the use of blockchain technology while maintaining the privacy required in such a business process.
“The launch marks a significant milestone in the global development of blockchain solutions,” Scentre said. “Lygon represents an industry solution that the participants could not have individually implemented.”
According to Scentre, digitising bank guarantees, which are usually issued manually and on paper, reduces the risk of fraud for all parties involved, decreases the potential for errors and significantly increases the speed of execution.
Scentre also said the Lygon platform reduces the time it takes to issue a bank guarantee from up to a month to on or around the same day.
It added that Lygon has the potential to benefit many sectors and to reduce the risk of fraud across billions of dollars guaranteed by the banks.
The pilot will run for eight weeks with live data and transactions for a test group of retail property leasing customers from July 3.
In subsequent phases, Lygon plans to expand the range of digitised bank guarantees that it supports across other industries as well as offering its services to other customers in the retail property sector.
The pilot will involve lease holders with retail outlets in some of Scentre Group’s Westfield living centres across Australia. After the pilot, Lygon intends to offer access to the platform to all issuers, applicants, and beneficiaries and support broader use cases over time.
The Lygon platform will be operated by Lygon 1B Pty Ltd, a company jointly owned by the five founding members ANZ, Commonwealth Bank, IBM, Scentre and Westpac.