Managed platform to provide access to DLT-based services for financial processes on a single, secured network

Barclays and Citi among the nine financial institutions participating in the initiative

CLS, a market infrastructure group delivering settlement, processing, and data solutions, and IBM today announced a collaboration on a proof of concept (PoC) for LedgerConnect − a distributed ledger technology (DLT) platform for the financial services industry designed to enable banks, buy and sell side firms, FinTechs and software vendors to deploy, share and consume services hosted on a shared distributed ledger network.

On LedgerConnect financial institutions will be able to access services in areas such as, but not limited to, know your customer processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data. By hosting these services on a single, enterprise-grade network, organizations can focus on business objectives rather than application development, enabling them to realize operational efficiencies and cost savings across asset classes.

Nine financial institutions, including Barclays and Citi, are participating in the PoC and have selected services from a number of vendors including Baton Systems, Calypso, Copp Clark, IBM, MPhasis, OpenRisk, SynSwap and Persistent Systems to participate in the PoC.

As financial institutions increasingly work to implement DLT into their operations, capital markets remain saturated with multiple systems performing the same business functions and with siloed pockets of data that require expensive reconciliation processes. DLT can help reduce these inefficiencies and improve the speed of doing business by providing a single, shared version of events and one implementation of common business functions.

However, it can be cost prohibitive and time-consuming for each vendor, bank, or consortium to create and operate its own unique DLT infrastructure for multiple services when proven technology already exists. LedgerConnect aims to solve this problem by providing a single shared and highly secured network on which multiple services can be deployed and consumed. This allows financial institutions to focus on transforming business processes rather than creating multiple new blockchain applications, networks and services in silos that could lead to increased interoperability costs and complexity.

Operating on a private permissioned network based on the IBM Blockchain Platform and Hyperledger Fabric technology, LedgerConnect will be designed for regulated and security-conscious enterprises and available across asset classes. Support for additional ledger technologies may be provided in the future, based on market demand and developments.

Commenting on LedgerConnect, Alan Marquard, Chief Strategy and Development Officer, CLS said, "LedgerConnect is part of CLS's strategy to explore how we can provide safe and robust solutions that create efficiencies and reduce risk for a diverse range of firms operating in the financial markets. We expect LedgerConnect to deliver enhanced efficiencies and economies of scale over single-purpose distributed ledger networks."

"Together IBM and CLS have been early pioneers in advancing blockchain solutions for the financial services space," said Marie Wieck, general manager, IBM Blockchain. "Building on the success of CLSNet and leveraging the strong relationship CLS has with the world's leading financial institutions, LedgerConnect is uniquely positioned as a blockchain marketplace for the financial services industry, which will accelerate innovation across the ecosystem with value added services for blockchain networks."

On completion of a successful PoC, generation of market demand, and receipt of all necessary regulatory approvals, CLS and IBM plan to make the platform widely available to the industry.

About CLS

CLS helps clients navigate the changing FX marketplace – reducing risk and creating efficiencies. Our extensive network and deep market intelligence enable CLS specialists to lead the development of standardized solutions to real market problems. Our innovative, forward-looking products make the trading process faster, easier, safer and more cost-effective – empowering our clients' success.