Big banks to roll out blockchain lease solution to help retailers

Despite the innovations of today’s digitally empowered business practices, retailers in Australia continue to struggle with laggard processes like obtaining bank guarantees for their leases.

However, one retail landlord has begun a large, collaborative effort to finally turn this around. Earlier this month, Scentre Group has joined with IBM, Commonwealth Bank and several other financial organisations to develop a means to secure lease bank guarantees via block-chain technology.

The resulting platform is called Lygon and it hopes to leverage block-chain’s powerful capability for transparency in order to effectively streamline the bank guarantee process.

As of the moment, Lygon is still currently doing a trial run with a test group comprised of Scentre’s own retail outlets within its Westfield living centres. After that, however, the group hopes that Lygon’s success will see it implemented across the wider breadth of the retail sector in the very near future. This leaves many advocates hopeful that it can finally put an end to the tenuous manual proceedings that are currently required for bank guarantees.

“The admin trail for bank guarantees, particularly at the end of lease, has been a minefield for decades.” says Retailer Lease consultant, Phil Chapman. “I will be watching the Lygon platform roll out with interest as the opportunity to establish a blockchain style register for leases should have been the next step to improving this process.”

While often associated with cryptocurrency, blockchain technology has had a surprisingly high amount of application when it comes to reinforcing transparency within business-to-business transactions.

From contracts to payments, it is clear that Lygon means to use this capacity to greatly reduce the risks of fraud with its bank guarantee transactions and empower all parties to see what is going on without the need for age-old red tape.

Furthermore, it could mean that these guarantees will be issued within just one day, in contrast to the current month-long wait with current processes. That means its success would be nothing short of revolutionary for both banks and retailers.

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