Israel’s Bank Hapoalim, Microsoft Join to Use Blockchain for Bank Guaranteesbr>
Israel-based Bank Hapoalim has teamed with Microsoft to develop a blockchain-based platform to create digital bank guarantees. Bank Hapolim is the first bank in Israel to explore blockchain potential for financial contracts.
A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. In other words, if the debtor fails to settle a debt, the bank covers it. A bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down loans, and thereby expand business activity.
Bank Hapoalim stated that many of the bank’s customers that require bank guarantees must physically travel to a branch for management. Blockchain technology will simplify the process of signing up guarantors and Microsoft will test the efficacy of the system using its Azure cloud services to develop a new tool.
“The new process will enable Bank Hapoalim customers to receive security documents in a digital, automated and secure manner, without physically coming to the branch and in a very short process,” said Bank Hapoalim chief executive officer Arik Pinto. “The use of blockchain technology will significantly improve the customer experience and the level of trust in the banking system.”
“This is the first collaboration of its kind in Israel in the banking sector that will enable a digital revolution, access to advanced services and the combination of technology and business needs,” said Microsoft Israel CEO Shelly Landsmann. “Microsoft is currently supporting a large number of blockchain technologies that enable the deployment of different types of networks, depending on the system and the business needs, on the Azure cloud platform.”
Bank Hapoalim is also working with other entities, including the Bank of Israel, to update the regulatory requirements to enable the use of the latest technology.