Sibos 2019: how Lygon will help your business
ADAM GRANT, HEAD OF TRADE & SUPPLY CHAIN, ANZ | SEPT 2019
Lygon has scope to grow.
One of the first distributed-ledger technology (DLT) based solutions in the financial services industry, aimed at simplifying the process around bank guarantees, Lygon is currently in pilot with a group of retail property customers.
But Hari Janakiraman, the creator of the concept and Head of Trade Product, Institutional at ANZ, says the technology has the potential to scale to other markets, industries and even countries.
“Bank guarantees… are essentially the grease which runs the economy,” he told ANZ Institutional on podcast. “In any type of commercial transaction, you will find guarantees.”
“The application [of Lygon] is worldwide and we already have received significant interest from parties outside of Australia… from the US, China and Israel, because they all face the same problem and guarantees are the same wherever you go.”
Janakiraman was speaking with me on podcast ahead of the Sibos 2019 financial services conference in London, where the future of Lygon and similar DLT solutions are expected to figure prominently in discussions.
You can listen to the full podcast below.
“The application is worldwide and we already have received significant interest from parties outside of Australia.” - Hari Janakiraman
Although conceptualised at ANZ, Lygon is joint venture project between this bank, CBA and Westpac, as well as tech behemoth IBM and retail infrastructure giant Scentre Group. The technology and agreement which supports it is significant given the goals it hopes to achieve could never have been met by any one participant on its own.
As I said on the podcast, the current customer experience with bank guarantees is one characterised by very physical and logistical components. Thanks to Lygon – now in commercial property leasing and potentially elsewhere in the future - the entire process will occur in a completely digital manner.
The Sibos financial services conference is here again.
Kicking off on September 23, one of the world's premiere international finance conferences will attract the most-innovative minds in the sector, setting the agenda for 2020 and offering insight into the trends and development which will shape the future of the industry.
In the lead up to and during the event ANZ Institutional will offer an insight into those themes, giving you a sneak peek at the ideas set to dominate the conference from ANZ’s industry experts and attendees themselves.
Janakiraman says the immediate feedback from the Lygon pilot has been overwhelmingly positive.
“In my almost 20 years of experience in banking I have not had many cases where I have shown a product to a customer and the customer says, ‘Yes, I will have it”,” he said. “Every customer who we have taken the platform to says ‘yes, this is great’.”
Janakiraman said for customers, the process around traditional bank guarantees can sometimes be an unwieldly burden. Lygon solves that problem.
“Bank guarantees are a really simple product but it's a product which has not changed for a very long time,” Janakiraman said. “It is paper based and it's very manual.”
“It's a problem for our customers in terms of managing these instruments. And it creates operational inefficiencies for the banks, like ANZ, who issued the instruments.”
For Janakiraman, digitisation is the ultimate solution.
“And by digitisation we are not talking about taking a piece of paper converting that into a PDF document,” he said. “We are talking about completely reimagining guarantees.”
You can listen to the podcast above to find out more.
For me, the biggest winners of Lygon radically transforming the cost and speed of processing are firstly bank shareholders and secondly – and most importantly – customers, because they can get these instruments faster in a way that increases trust.
And when trust is increased in these processes the whole economy ultimately benefits.
Adam Grant is Head of Trade & Supply Chain at ANZ
RELATED INSIGHTS AND RESEARCH
Sibos 2019: why banks should be thanking fintech
Three ANZ experts chat on podcast about the big themes set to dominate Sibos, the biggest financial services event of 2019.
Fintech: this time it’s different
For banks - and their customers - now is the time to jump aboard the fintech train.
The best defence against trade-based money laundering
Two experts chat on podcast about financial crime prevention and the need for a shift in mindset among banks.