Think narrow and work your way out – that’s the way Nigel Dobson, ANZ’s Transformation Projects general manager, thinks about executing blockchain and distributed ledger technology projects.
While Dobson says he admires the task taken on by the Australian Stock Exchange to transform its CHESS system for the DLT era, he says he’s finding success focusing on a very narrow slice of the value chain.
The ASX is grappling with competing interests and priorities as part of the broad consultation process.In contrast to the ASX process, Dobson says he’s taking smaller bites and drilling down.
“What we’re doing is zeroing in on a piece of the value chain we really want to fix and transforming it, and in doing so, leveraging some technology and some learnings to then expand it out across other areas,” Dobson explains to banking technology specialists at the APAC Blockchain Summit in Sydney in March.
“I admire what the ASX is doing – it’s a full value chain, multi-actor, multi-year ambition,” Dobson comments.
“This is nothing other than a comment to say, well done, but we think it’s a long path to value in terms of all of those all encompassing value chain implementation, no matter how good the technology is, and I think it’s very good,” Dobson says.
The area Dobson has focused on at ANZ is in creating a shared ledger between it and Wells Fargo in the United States, an institution that’s part of the same Linux Foundation collaborative project.
In particular Dobson has focused on creating a shared ledger that can remove the need to reconcile separately regulated ledgers covering the same events within the existing nostro-settlement reconciliation process.
A nostro bank account is an account that a bank holds in a foreign currency in another bank.
“Repositioning of reconciliation from end of the day out of the accounting systems of banks and at the start of the transaction isn’t as sexy as solving crypto currency but it’s something to work from,” Dobson says, adding that If you’re able to get a network like this scaled up to include multiple counterparties you can have more trusted relationships with more counterparties.
He says he’s still working on scalability and confidentiality with five other financial institutions.
“We think that taking a narrow view and scaling up from that narrow view can lead to benefits sooner than trying to encompass multiple parts of the value chain,” he says.
Dobson says he’s currently looking at honing in on other areas for DLT including bank guarantees used by landlords for tenants and he is also talking to potential partners to work with on DLT solutions to solve specific problems in the agribusiness supply chain.