Banking Innovation Summit Cr oatia Clive Cooke | R3 | F e - PowerPoint PPT Presentation

Banking Innovation Summit Cr oatia Clive Cooke | R3 | F e br uar y, 2018

The R3 network is an alliance of the world’s largest banks, insure r s, re gulators and e xc hang e s c ommitte d to de live ring the ne xt ge ne ration of fina nc ia l infrastruc ture ba se d on bloc kc hain R 3 - Pr ivate and Confide ntial p2.

Bloc kc hain is the ne w ope r ating syste m for F inanc e Bank A Bank B Bank A Bank B Bank B Ac tion Ac tion Ac tion Ac tion Ac tion Ac tion Pe r c e ption Shar e d Pe r c e ption = T r uth Pe r c e ption Pe r c e ption Pe r c e ption Pr oc e ssing Shar e d Pr oc e ssing L ogic Pr oc e ssing Pr oc e ssing Pr oc e ssing Communic ation Communic ation Inte r ne t Shar e d Communic ation Be for e the Inte r ne t Now Afte r Shar e d L e dge r p3 . R 3 - Pr ivate and Confide ntial

uth – “I Know T hat What I Se e Is What You Se e ” T he T r We both se e the T his is wha t I same thing T his is wha t I think think I owe I am owe d Supplie r Custome r Supplie r Custome r T OMORROW T ODAY R 3 - Pr ivate and Confide ntial p4.

Bloc kc hain e nable s c ompe ting fir ms to c ollabor ate and maintain one se c ur e , shar e d database ▪ Pa rtic ipa nts in a Blo c kc ha in ne two rk e a c h: ✓ run so ftwa re tha t c ommunic ate s with the ir c o unte rpa rts a nd ✓ e na b le s a ne ar -instant upda te in the ir syste ms witho ut re lying o n inte r me diar ie s, r e c onc iliation , matc hing or manual fixe s. R 3 - Pr ivate and Confide ntial p5.

Bloc kc hain has huge pote ntial to c hange e xisting busine ss F inanc ial Institutions Re gulator s Ope r ations Individuals T he se four use • • c ase s c ould Cr oss Bor de r Payme nts • Clie nt Onb o a rding Cro wdfunding • Anti-Mo ne y • alone Anti- Mone y • Intra c o mpa ny L a unde ring / K no w • Virtua l Ide ntity L aunde r ing / Know ge ne rate Se ttle me nt Yo ur Clie nt • Cre dit Sc o ring Your Clie nt • $60- 80bn No rma lize Re fe re nc e • Co mplia nc e Re po rting • De r ivative s Cle ar ing • Da ta Cro ss Bo rde r in c ost • • Risk Visua liza tio n Re mitta nc e • Re po Cle ar ing T ime sta mping savings 1 • • T ra de Re c o nc ilia tio ns • • Ba se l II I Co mplia nc e Ac c o unt Po rta b ility Va ult/ E sc ro w Se rvic e s • F X Se ttle me nt • Bro ke r F ra ud • • Custo me r De po sit Co st Clie nt F und • Ide ntific a tio n L o a n Se ttle me nt T ra nspa re nc y • Pe e r-to -Pe e r L e nding • • Se c uritie s Ag re e me nts Co lla te ra l • T ra de Re po rting a s Sma rt Co ntra c ts Ma na g e me nt R 3 - Pr ivate and Confide ntial p6. (1) So urc e : Mc K inse y 2016 F inding s F ro m Re se a rc h Into Distribute d L e dg e r T e c hno lo g y

T he R3 Me mbe r Ne twor k Re gulators: 20+ Re g ula to rs a nd Ce ntra l b a nk me mb e rs inc luding ; • HK MA • AMF Mo ntre a l • Ab u Dha b i Glo b a l Ma rke ts Partne rs: 70+ pa rtne rs whic h inc lude s syste m inte g ra to rs & a dviso ry, inde pe nde nt so ftwa re ve ndo rs, Infra struc ture / te c hno lo g y pa rtne rs a nd ne two rk se rvic e pro vide rs R 3 - Pr ivate and Confide ntial p7.

R3 Partne r Ne twor k Pa r tne r Solutions De live r y Pa r tne r s (Inde pe nde nt Softwa r e Ve ndor s) (Syste ms Inte g r a tor s & Advisor y) Infr a str uc tur e / T e c hnolog y Pa r tne r s Ne twor k Se r vic e Pr ovide r s R 3 - Pr ivate and Confide ntial p8.

Cor da Blo c kc ha in so lutio n fo r F ina nc ia l Institutio ns

Built fr om the gr ound-up and de signe d for financ ial se r vic e s by the financ ial se r vic e s industr y The R3 members’ Architecture Working Group, c o mprising c o ntrib utio ns fro m 300+ individua ls, re a lize d tha t e xisting b lo c kc ha ins we re no t a ppro pria te fo r the wo rld o f F ina nc e . R 3 - Pr ivate and Confide ntial p10.

Conse nsus : a c hie ve d a t individua l de a l Bloc kc ha in- inspir e d : ta ke s the b e st le ve l, ra the r tha n syste m le ve l. Suppo rts a a ttrib ute s fro m Bitc o in a nd va rie ty o f c o nse nsus me c ha nisms. E the re um, b ut no c rypto c urre nc y Re g ula tor- foc use d : de sig n dire c tly e na b le s E nte r pr ise g r a de : b uilt spe c ific a lly re g ula to ry/ supe rviso r o b se rve r no de s. fo r fina nc ia l ma rke ts. Da ta pr iva c y : tra nsa c tio ns sha re d Sma r t c ontr a c t : stro ng link b e twe e n o n a ne e d-to -kno w b a sis. le g a l pro se a nd sma rt c o ntra c t c o de . E a sy inte g r a tion : re use s e xisting ja va de ve lo pe r skills ma king inte g ra tio n with b a nk syste ms e a sy a nd sa fe . R 3 - Pr ivate and Confide ntial p11.

Inte r ope r able Ne twor ks Busine ss Ne two rks One No de = Many Apps, F le xible Ne two rks, No S trande d Asse ts R 3 - Pr ivate and Confide ntial p12.

F r om Ide a to Applic a tion

Pr oje c t Working Groups Dig ita l Asse ts T r a de F ina nc e Dig ita l Ide ntity Insur a nc e Dig ita l Ca sh R 3 - Pr ivate and Confide ntial p14.

T he Cor Dapp path to pr oduc tion INCUBAT OR ACCE L E RAT OR GO- L IVE Whe re me mb e rs b y re g io n o r b y pro duc t Whe re e xpe rime nts c o me to life * De plo yme nt Co nside ra tio ns e xplo re b lo c kc ha in so lutio ns Ba nk inte g ra tio ns F inT e c h pa rtne r Jo int Ve nture Risk Ma na g e me nt De live ry Pa rtne r Dapps Se c urity Arc hite c ture Cor Owne rship c o nside ra tio ns Inte g ra tio n Sprint Proje c t F ast trac k re sults Graduate I ndustry RF P Pro c ure me nt De dic a te d R3 te a m Co nside r L e g a l/ Re g s, Da ta Eva luate pro je c ts a nd le a d c o lla b o ra tio n Ora c le s, Pa rtne rs, re sults to g ra dua te Qua lity Assura nc e to ra tify Busine ss Pro duc tio n Re a dine ss the suc c e ssful Co rda E nte rprise Ca se o ne s to the Ac c e le ra to r R 3 - Pr ivate and Confide ntial p15.

Matc hing Par tne r s to Oppor tunitie s R3 wor k with softwar e ve ndor s and par tne r s to build applic ations (Cor Dapps) that will sit on top of the Cor da Ne twor k ISV & Ne twor k Par tne r s Custome r s |Me mbe r s | Stake holde r s Cor Dapps De live r y & Infr astr uc tur e Par tne r Re gulator s |Ce ntr al Banks | L e gal p16. R 3 - Pr ivate and Confide ntial

Pr oje c t Por tfolio

Ne twor k of Par tic ipants A X oje c t HQL Pr T oke nisation of baske ts of se c ur itie s to distr ibute liquidity mor e e ffic ie ntly - Pilot – Digital Asse ts Ac c e le r ator A c o lla te ra l le nding so lutio n fo r so urc ing o r pro viding Hig h Qua lity L iq uid Assets (HQLA) on R3’s Corda Vision T o b uild a n e xc ha ng e tha t impro ve s HQL A upg ra de / do wng ra de s b y utilizing distrib ute d le dg e r te c hno lo g y fo r the to ke niza tio n o f b a ske ts o f Obje c tive s se c uritie s tha t a llo ws fo r q uic k, le g a l tra nsfe r o f HQL A a nd re - hypo the c a tio n • Impro ve c o lla te ra l fluidity with a n o pe ra ting mo de l tha t do e s no t re q uire se c uritie s to b e mo ve d a c ro ss CSDs • Be ne fits Re a l-time a nd a to mic le g a l title tra nsfe r e na b ling DvD (De live ry vs. De live ry) o f b a ske ts o f se c uritie s • E nha nc e re g ula to ry tra nspa re nc y o f c o lla te ra l c ha ins via a standardized and transparent marketplace, with a “Collateral Tracking” view for regulators • Mitig a te syste mic risk b y e na b ling o rde rly de fa ult unwinds R 3 - Pr ivate and Confide ntial p18.

Ne twor k of Par tic ipants Pr oje c t L e nde r Comm Automation o f le nde r c o mmunic ations be twe e n age nt banks and le nde r s - Pilot – Digital Asse ts Ac c e le r ator T o b uild a distrib ute d le dg e r te c hno lo g y pla tfo rm fo r the syndic a te d Vision le nding c o mmunity Obje c tive s T o drive tra nspa re nc y a nd e ffic ie nc y in the syndic a te d lo a n ma rke t By using Co rda , Pro je c t L e nde rCo mm e xpo se s re a l-time c re dit a g re e me nt, a c c rua l b a la nc e s, po sitio n info rma tio n a nd de ta ile d Be ne fits tra nsa c tio n da ta to le nde rs, dire c tly fro m a g e nt b a nk lo a n se rvic ing pla tfo rms suc h a s Finastra’s F usio n Ba nking L o a n IQ. Pro je c t L e nde rCo mm a ims to sla sh o pe ra tio na l c o st a nd sla sh o pe ra tio na l c o st a nd b urde n o f a g e nt to le nde r a dministra tio n a nd de live r se lf-se rvic e c a pa b ilitie s to le nde rs, pro viding a c c ura te info rma tio n o n de ma nd to o ptimize lo a n po rtfo lio s p19. R 3 - Pr ivate and Confide ntial