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State Street Bank, a large custody bank in the United States has been experimenting with blockchain technology to streamline securities lending. According to The Wall Street Journal, the bank was one of nine banks working with R3 to make financial services more efficient by using blockchain technology.
While it didn’t have one particular product in mind, State Street was leaning towards using distributed ledger technology (DLT) for a host of its products and services.
State Street Bank sees exciting potential in DLT
State Street has planned to leverage distributed ledger technology for several of its functions including data handling, the management of financial products like loans within its institutional division. These initiatives are part of the bank’s development plans.
The bank also aims to create effective synergies with start-ups like Fintech Sandbox. With this partnership, Fintech Sandbox will help the bank administer its services a lot more efficiently.
In addition, State Street’s Chief Technology Architect Moiz Kohari has confirmed the bank’s desire to upgrade its data analyzing and processing capacities. This will help its customers to better understand market dynamics. Moreover, State Street has impressively developed a system for peer to peer securities lending that aims to do away with hedge funds and other intermediary organizations.
Other US banks taking notice
Many large US banks, like BNY Mellon, Bank of America and Citi are in the process of integrating blockchain technology to make processes more efficient. In spite of an unwelcome start, blockchain technology is gradually making its way into traditional financial institutions for its disruptive potential.