A new blockchain-based Digital Guarantee Network has been implemented by Israeli bank, Bank Hapoalim, marking the first Israeli bank in the country to do so. The network, which is owned and operated by Tata Consultancy Services (TCS) will run on Microsoft’s Azure cloud.
The Digital Guarantee Network ensures ‘maximum compartmentalization of information between issuers and beneficiaries’ and is expected to launch in the first half of 2021. It is the first time in years that an attempt has been made to connect all the financial entities in the Israeli economy in order to improve and refine the processes with customers and third parties to customers' transactions.
With the new solution, institutions that issue guarantees can communicate entirely digitally with guarantee beneficiaries, including government ministries and public bodies, companies, corporations, and small businesses to private individuals. Currently, guarantee beneficiaries do not have a digital communication channel with the issuers, forcing them to contact issuers in more traditional ways such as official letters or direct communication with branches.
"The new network of beneficiaries is a significant step to promote digitization in the guarantee market and in other areas,” said Dov Kotler, CEO of Bank Hapoalim. “This is a major breakthrough, and the greater the number of organizations and customers that participate in it, the better it will be for the entire market.”
He continued: “In an age where remote management tools have become a necessity, the Digital Guarantee Network presents a vision, that on the one hand simplifies processes for the customers and on the other hand - blockchain technology maintains the privacy of information and builds a system of trust between all the players in the market.”
Ronit Atad, General Manager of Microsoft Israel described the collaboration as “a great example of how technology can be harnessed to develop a groundbreaking business application and produce a distinct advantage, giving quick and safe access for all people involved in the venture, including customers and suppliers.”
“This project, delivered through our Banking Services Bureau, is the first of many ecosystems we will be participating in globally, for digital financial documents," added N. Ganapathy Subramaniam, COO of TCS.
Bank Hapoalim is one of Israel's most significant financial institutions, with a network of branches and commercial banking activities across all areas of banking. TCS is an IT services and consulting organization that partners with large businesses. It has 443,000 consultants in 46 countries, generating annual revenues of roughly $22 billion. Microsoft has been active in Israel since 1989 and has three clouds: Microsoft Azure, M365, and Microsoft Dynamics.