YES Bank implements Blockchain technology to secures digital banking

MUMBAI: YES Bank, one of India’s largest private sector bank, has implemented a multi-nodal Blockchain transaction to fully digitize vendor financing for Bajaj Electricals.

YES Bank says that the implementation has been done on a blockchain-based smart contract written by fintech start-up Cateina Technologies.

YES Bank has also decided to leverage IBM Watson Conversation, a cloud-based cognitive service, to enhance the digital experience of partners, corporate clients and developers collaborating with them on the integrated Blockchain – API Banking platform.

Capitalizing on the efficiency and security features of Blockchain, YES Bank has used the Hyperledger Fabric supported by IBM to design a vendor financing solution which allows Bajaj Electricals (anchor client) to digitize the process for discounting and disbursal of funds to its vendors by integrating seamlessly with YES Bank’s systems. The solution will also facilitate an automated debit from Bajaj Electricals’ account by YES BANK.

The business logic and rules are captured in a smart contract (Chain Code) developed by Cateina Technologies. The key business advantages and highlights of this blockchain implementation for vendor financing include:

The entire process cycle for bill discounting reduces from four days (owing to manual intervention and transit) to almost real-time;

Transparency to all parties through blockchain’s shared public ledger;

End-to-end digital process eliminating paper trail & manual intervention;

The entire transaction history of a particular vendor is recorded and is immutable through blockchain;

The transaction status along with details are seamlessly transmitted to Bajaj Electricals’ Enterprise Resource Planning;

Seamless integration with existing API Banking implementation by YES BANK using IBM’s Enterprise Service Bus(IIB), API management and Datapower solution.

Use of a permissioned blockchain with flexibility to add other participants later; and

Use of superior Cryptokey to offer state-of-the-art security for both documents and transactions on the Blockchain.

YES Bank says it will also use IBM Watson APIs on IBM Bluemix to drive a pioneering engagement program that will enrich the digital experience of the bank’s partners, developers as well as corporate clients. The program is a conversational agent service of IBM Bluemix cloud which uses Watson APIs (Natural Language Classifier & Conversation Agent) to create a natural language interaction with the partners and external developers, when providing support on queries related to YES Bank banking APIs, the Blockchain APIs, how to subscribe etc.

The aim of the system is to help YES Bank’s partners and developers on-board and integrate their system quickly and simply whilst keeping waiting times to a bare minimum. With the conversation agent being able to find answers from the various backend sources in just a split second, the staff will be freed up to handle more complex problems and partners can benefit from a much simpler and faster process.

YES Bank has put in place a detailed roadmap on commercializing Blockchain based Banking solutions in India and is exploring use cases for implementation towards ‘Letter of Credit’ and Documentary Collections, Foreign Remittances and Partnering with Correspondent Banks for Trade Finance among others.