JPMorgan to Add New Features to its Blockchain Network for Global Banks
Leading multinational investment bank JPMorgan Chase is broadening its use of blockchain technology to help but down the number of global payments that are rejected by errors. This news comes via a Financial Times report published yesterday.
JPMorgan will be adding new features to its blockchain-enabled Interbank Information Network (IIN), which is used by over 220 banks globally. Initially designed to help institutions share payments data in real time, it will now be used for a more advanced purpose.
JPMorgan’s head of global clearing, John Hunter, said the company has built a new feature that has the ability to verify whether a payment will hit a valid bank account — a tool that could be valuable not only for preventing fraud, but eliminating mistakes caused by clerical errors. As of now, if a bank account is mistyped due to a typo in one of the many codes and account numbers that are required to send money, it can take days for the transaction to be rejected, delaying the process significantly. Hunter told the Financial Times:
“Banks straight through processing rates are in the mid-80s to mid-90s. It’s that gap — the 5 to 20 percent of payments — that have to be assessed by operations where we’re trying to alleviate some of that pain.”
This new JPMorgan feature will be live in the Fall. The company’s IIN is free to use right now, but it may become a subscription service over time.
In addition to its improvements to IIN, JPMorgan is also trying to attract fintech to the network by allowing them to develop applications in a sandbox environment where they can access data modeling, secure messaging, and file transfers. Hunter told the Financial Times that this program could remove a lot of the common hurdles for startups, noting: “Developers only need to bring their intellect.”
In February, JPMorgan announced it would be launching its own cryptocurrency, called JPM Coin, that would increase the efficiency of settlements, but the announcement was met with some criticism in the crypto space.