Crédit Mutuel Arkéa, one of the largest French banks by deposits, is formed by Crédit Mutuel Bretagne, Sud-Ouest and Massif Central federations and about 20 specialized subsidiaries including Fortuneo, Monext, Arkéa Banque Entreprises et Institutionnels, Financo, Federal Finance and Suravenir. With 3.6 million customers, the bank offers a comprehensive line of banking, financial and insurance services for individuals, businesses and institutional clients in France and Belgium.
Arkéa and IBM are working to create a single cross-businesses KYC platform for the bank, helping to reduce unnecessary duplication of information and requests. The new blockchain network federates all valid existing evidence already stored in the bank’s multiple records, which simplifies administrative processes.
"Blockchain is a transformative agent in our operational application, as proven by this project -- the first of its kind in France. This pilot offers a complete view of customers' documents across our distributed network," said Arkéa COO for Innovation & Operations, Frédéric Laurent. "The project helped us to understand and master blockchain for other client uses. Now, we are ready to incorporate this technology in our ecosystem."
The new blockchain network, built on the open-source Hyperledger Project fabric, reinforces consistency, traceability and privacy of the information, which is critical in a highly regulated environment and could enable Arkéa’s customers to deliver proof of their identity to third-parties, such as local utilities, retailers or regulated service providers. “This demonstrates the disruptive capabilities of blockchain technology beyond common transaction-oriented use cases,” notes the press release.
Both IBM announcements refer to a new study performed by the IBM Institute for Business Value (IBV), titled "Fast Forward: Rethinking Enterprises, Ecosystems and Economies." According to the study, blockchain networks will “vaporize current frictions” in the economy that are inhibiting business growth, such as participants of a transaction not having access to the same information or the high price of intermediaries. These frictions, which add costs and complexity to global business and trade, can be reduced or eliminated by blockchain technology, enabling greater efficiency and less risk.
The IBV, part of IBM Global Business Services, focuses on managerial and economic issues faced by companies and governments around the world, developing fact-based strategic insights for senior business executives around critical public and private sector issues. With offices in China, India, Ireland, Japan, the Netherlands, South Africa and the United States, the Institute publishes dozens of major studies each year.
According to IBM, blockchain technology offers workable solutions to previously intractable inhibitors across industries.
“As frictions fall, a new science of organization emerges and the way we structure industries and enterprises will take novel shape,” notes the study. “With transparency the norm, a robust foundation for trust can become the springboard for further ecosystem evolution. Participants and assets once shut out of markets can join in, unleashing an accelerated flow of capital and unprecedented opportunities to create wealth.”
Technology has a long history of reducing frictions; the letter of credit and the telephone being two early examples.
“The internet threw into hyper-drive what was once a slow march to dissipate friction,” notes the study. However, important sources of friction haven’t yet been “digitized away.” In particular, information frictions (imperfect information, inaccessible information, information risks), interaction frictions (transaction costs, degrees of separation, inaccessible marketplaces) and innovation frictions (institutional inertia, restrictive regulations, invisible threats), continue to slow down and add costs to global business and trade.
The IBM study argues that blockchain technology can so greatly reduce all remaining frictions that “organizations will be transformed in ways not yet imagined,” and “recast our institutions and economy in new form.” With a nod to emerging programmable transactions and smart contracts, the authors argue that business networks “will achieve greater levels of autonomy, reducing the need for human governance and ultimately evolving into self-governing, cognitive business networks.”