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India Syndicate Bank to accelerate ATM reconciliation using Blockchain technology
20 January 2019 of Akshay Makadiya
One of India's oldest lenders, Syndicate Bank, will leverage its private blockchain network to simplify and shorten the Automated Teller Machine (ATM) reconciliation process. It is a move that could prove instrumental in bringing the DLT into the mainstream of the country.
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Turn the ATMs into blocks
According to local media, the Times of India, the Manipal-based Syndicate Bank is developing a blockchain-based ATM network to accelerate transaction validation in near real-time while simultaneously accelerating ATM reconciliation procedures.
For example, in the case of an ATM malfunction during cash disbursement, a customer must file a claim with the bank for the failed transaction. Following the complaint, the bank will implement a series of cumbersome manual workarounds, under which a bank manager will physically collect data from the ATM and reconcile them with the failed transaction data. The process is slow and the customer has to wait about a week to receive the funds.
With the new private blockchain model, the ATM will act as a block within the network, ensuring that transactions at the ATM will be reconciled every 24 hours. In the blockchain system, in the case of an ATM malfunction, the customer will receive an immediate notification of a refund, with the transaction canceled within two days.
The managing director of Syndicate Bank, Mrutyunjay Mahapatra, said that using the system operated by blockchain "the amount will be credited back to the account within 2 working days".
However, for now, the bank has not disclosed any technical information on how it will incorporate ATMs into its distributed register infrastructure.
Blockchain fever in the banking sector
While Syndicate Bank is the first Indian lender to use ATM blockchain technology for reconciliation, other payment institutions and banks globally have rethought the idea in the past.
Just a few weeks ago, the second major financier of the United States, the Bank of America, presented a patent for blockchain automatic counters that speed up transactions and improve the overall operation of cash handling devices. In addition, the patent application also stated that it will use blockchain technology for real-time reconciliation when settling transactions between financial institutions.
In the past, the China UnionPay payment card giant, the only inter-bank network linking the ATMs of all banks in China, has filed a patent for the development of a network of automated blockchain chain automated counters.
In addition to the use of blockchain technology with ATMs, a number of Indian banks have worked to introduce technology into various banking operations. Last year, seven Indian private banks collaborated with India's largest software services exporter, Infosys, to develop a system blockchain-based commercial finance network.
In addition, the third largest bank in the private sector, Axis Bank, Kotak Mahindra Bank and IndusInd Bank, are all considering RippleNet to accelerate and reduce cross-border payment costs.
Can blockchain technology revolutionize the banking sector? Share your opinions in the comments section below.
Images via Pixabay
