Societe Generale involved in the DLT PoC for real time nostro monitoring
As part of an active search for innovative solutions on the payment methods market, Societe Generale took part in the SWIFT gpi DLT PoC (Proof of Concept) for Nostri account reconciliation.
Societe Generale, which is very involved in SWIFT’s projects, is a member and user of the “SWIFT gpi” service. These innovative solutions for cross-border transfers should allow banks to offer their customers better service while optimising their internal processes. Societe Generale’s participation in this SWIFT initiative was therefore both natural and enthusiastic.
The “Nostro reconciliation” PoC had several objectives:
– To validate the use of a disruptive technology based on DLT (Distributed Ledger Technologies), which can be used to create a decentralised database and securely exchange encrypted data. Currently used in blockchain, this technology is also used for payments, particularly in the form of crypto-currencies like bitcoin, and more recently in international trade finance through the “We.trade” platform, of which Societe Generale is a member. Beyond the technological foundation, this POC aims to determine whether there is a real added-value compared to various banks’ existing solutions.
– To evaluate the level of the potential benefits linked to real-time Nostri account liquidity management and reconciliation using a DLT solution.
– To evaluate the potential integration of a solution of this type based on the SWIFT gpi initiative, using the UETR (Unique End-to-end Transaction Reference) rolled out during the November 2017 SWIFT release.
– To ensure that this multilateral technology meets all information security and data confidentiality requirements.
As part of this project, SWIFT developed a cloud platform shared by all of the PoC participants (a total of 35 stakeholders representing the world’s biggest banks). In order to test the platform’s technical viability, SWIFT created 34 use case scenarios covering the main cross-border transaction standards (reconciliation of an MT103, MT202, etc.). This made it possible to make Nostri entries in the ledger in real time, reconcile the funds, and monitor intraday liquidities using a precise and relevant time stamping system.
The final tests are currently under way. SWIFT will officially announce the results of the experiment in early 2018.
Societe Generale is proud to have supported SWIFT in this adventure and to be involved in creating the banking tools of the future.