In the News:
Enterprise Times – by Charles Brett
EPAM Systems (EPAM) is partnering with Fnality International (Fnality) to deliver payment-on-chain to support tomorrow’s wholesale banking requirements. EPAM is a provider of digital platform engineering and software development services. Fnality is a consortium of wholesale banks founded to create a network of distributed Financial Market Infrastructures (dFMIs).
“With more than 25 years of next-gen technology expertise honing collaborative, productive and secure remote working practices, EPAM is uniquely positioned to engineer and optimize Fnality’s innovative payment infrastructure in an agile and distributed working environment,” said Ben Brinkworth, Head of Financial Services in UK & Ireland, EPAM.
“As banks look to reduce costs now more than ever, our partnership with Fnality will enable the wholesale banking sector to increase business agility, reduce systemic and credit risk and improve settlement efficiency through new Fnality Payment Systems.”
Financial payment services are changing
The financial services industry is undergoing a digital revolution. It has a growing interest in digital assets, especially the need for digital cash in the form of cash on ledger.
EPAM and Fnality are looking to create a next-generation payment system infrastructure as a catalyst to drive peer-to-peer financial markets. The initiative, backed by a consortium of financial institutions, including some of the world’s most important banks is particularly relevant given the disruptions caused by Covid-19.
Due to the current health environment, EPAM is shifting to a distributed remote working environment by leveraging virtual workshops and agile methodologies. After demonstrating the successful operation of the first use case on the system, Fnality and EPAM will add more currencies, legal entities from shareholders, as well as additional participants and business applications in 2021.
The EPAM / Fnality partnership
In this partnership, EPAM will provide Fnality with software development services to:
- create a series of new national peer-to-peer Fnality Payment Systems (FnPS)
- facilitate its integration and interoperability within blockchain networks or legacy systems.
Conventional processing of trade transactions involves multiple parties and locations, especially in cross-border commerce. The inherent complexity too often:
- leads to delayed or failed settlements
- exposure to increased risk.
With a blockchain payment system, all the contractual obligations discharge peer-to-peer. They are irrevocable and instantaneous.
The FnPS will:
- settle tokenised value transactions
- reduce reliance on intraday unsecured credit transactions.
Further, the distributed nature of FnPS seeks to eliminate negative system impact (from individual participants or nodes). This should produce:
- faster settlements
- reduced systemic, operational and credit risks.
“We’re very pleased to have EPAM join with Fnality as strategic partners as we launch into the main technical delivery of the solution,” said Rhomaios Ram, CEO of Fnality International.
“They are an organization with great experience in the financial sector and within blockchain projects. They will be integral in delivering the Fnality Payment System to enterprise grade.”
Enterprise Times: what does this mean
The search for new model payment and settlement systems, especially for supply chains, seems infinite. The attractions of blockchain are everywhere (for example, Marco Polo, Tradeshift, KPMG Origins, etc.) There are many new businesses and organisation aspiring to a share of what has been a fairly sedentary part of the market. Integrating cross-border financial transactions should improve efficiency as well as enable faster trade settlement.
Where the EPAM / Fnality partnership for payment-on chain seems different in the proposed use of tokenised transactions. On the one hand, this seems reasonable. But does the involvement of tokens introduce a different order of financial (rather than operational) risk? It is a big question for a customer to digest.
The original article can be found here.