- Italy’s banks to incorporate the use of blockchain technology in their operations come 2020
- The blockchain incorporation is set to improve transparency and efficient communication
- The IT budget allocated in the banking sector has been on the rise since 2014
On June 19, 2019, the Italian Banking Association (ABI) revealed that the banks in Italy are planning to incorporate blockchain technology into their operations come March 2020. This is the very first use-case of blockchain technology in Italy’s banks.
Italy banks are set to integrate distributed ledger technology (DLT) into their operations to boost their settlements. The use of blockchain technology in the said banks is also most preferred because it will help improve transparency in the bank’s transactions and also bring about efficient communication in their ecosystem.
The Spunta Project
This new development is part of a project managed by the ABI lab called the Spunta project.
Spunta project is set aside for research and innovation for the implementation of DLT among the Italian banks. The ABI has been testing Spunta among its banks since February with a total of 18 banks involved. The 18 banks represent 78 of percent of the Italian Banking industry in terms of employee numbers. The first testing stage involved 14 banks, and it was a great success, as concluded in October last year.
The Perks of Blockchain Technology Going Beyond
It is projected that transactions between banks will now be fully visible with daily reconciliations as opposed to the typical monthly settlements. Also, banking operations that often result in complex discrepancies are likely to be solved with the multiple nodes data storage and the use of smart contracts.
The Italian government is all in with this project as attested by a large number of house representatives who have already approved a bill that fully defines DLT and blockchain. The bill also describes the criteria that smart contracts will need to follow for legal credibility.
ABI’s Survey reports IT Budget Rise Since 2014
According to ABI’s latest study on the relationship between the Italian banking industry and the use of IT, investments allocated in this sector have been on a constant rise since 2014, with a huge notable increase in 2018 which was up to 5.7 percent.
In the same vein, 88.5 percent of the banks have been noted to have a current IT budget that is either higher or equal to that of 2018. Mostly, this budget is supposed to cover mobile banking services, infrastructure upgrade, reduction of cyber risks, and their management and digital channels.