IBM Cuts Credit Unions Deal For Blockchain Services In $1.7 Trillion Industry
IBM and Denver-based credit union service organization CULedger, have struck a collaboration deal by which new blockchain-based services will be pioneered to help credit unions provide their members with greater efficiencies and an enhanced user experience. CULedger focuses on delivering “innovative applications” to credit unions via its cross-border global distributed ledger platform.
Specifically, IBM and CULedger, a consortium of credit unions, are to work together to use permissioned blockchain technologies to create an immutable audit trail, which can be used to create new business models and transform existing business processes for credit unions.
The parties also intend to help foster “greater financial inclusion” by extending the reach of services to a broader range of new members.
As with all financial institutions, having greater inclusion and a more transparent method of auditing provides account holders, investors and regulators with much more confidence as to that organization’s ability to carry out transactions that are not involved in any shady dealings. This is a definite win for account holders, as their charges for financial transactions should be less, as the blockchain’s ability to settle financial transactions is cheaper and quicker. This should also be a win for IBM, as they will become a leader on the blockchain and financial side of things. This should also be a win for regulators, as they can provide better auditing and audit trails should the need arise.
In the United States (U.S.), credit unions can either be chartered by the federal government or a state government. And, as of 2016 there were 5,757 credit unions with almost 104 million members comprising 45.4% of the economically active population. Credit union leagues exist across America in the shape of the Association of Vermont Credit Unions, California and Nevada Credit Union Leagues and Ohio Credit Union League.
Across the Pond in Britain the first credit union start trading back in 1964, and over the last 50 or so years, they have grown to provide loans and savings to more than 1.2 million people across England, Scotland and Wales.
Blockchain & Credit Unions
The collaboration with ‘Big Blue’ – IBM – follows CULedger becoming a member of the enterprise software firm R3’s global blockchain ecosystem last December.
It joined R3’s global network of over 200 of the world’s largest financial services firms, technology companies, central banks, regulators, and trade associations working together on R3’s Corda platform, which is already being used in industries spanning financial services, healthcare, shipping, insurance and others.
Since 2016, IBM has worked with a wide variety of clients across financial services, supply chain, government, retail, digital rights management and healthcare sectors to implement blockchain applications. And, today it operates a number of networks in this space that are running live and in production, around 1,600 staff working in blockchain and DLT across all areas and sectors.