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Alfa-Bank (Russia), X5 Retail Group launch Russia’s first liquidity management blockchain service

September 12, 2019. TAG: Financial Services

Alfa-Bank and its partner, X5 Retail Group, have launched customizable service Distributed Treasury and Cash Management (DTCM), which enables the bank’s corporate clients to manage their payments, loan and deposit products, and liquidity pool inside the holding. DTCM is a bridge to the Bank-as-a-Service (BaaS) model for corporations.

“Practically every case is unique in big business, every client is special, and customization is a must. Clients are constantly evolving and optimizing in-house processes,” Director of the Alfa-Bank Center for Innovations Research and Development Denis Dodon said. “The key difference between DTCM and other offers available on the market is that we give our client not just a channel to send orders to the bank but a way to shape up business logic of the product and actually ‘create a bank’ for the client’s convenience.”

Unlike the traditional banking model, which only allows a client to send orders to the bank, the BaaS model moves business logic of banking products and services outside the bank’s perimeter and provides an opportunity of flexible customization of solutions to accommodate the client’s needs. DTCM is an application built on the Waves Enterprise blockchain platform of the Waves company that combines a series of breakthrough solutions, such as open banking, open API, distributed ledger technology, and smart contracts.

“The experience gained jointly with Alfa-Bank and Waves Enterprise constitutes a new benchmark in our interaction with banks: we get a unified treasury application, improve data management, and cut costs and operational risks. We are set to broaden the use of distributed ledger technology in our group in order to optimize processes; it will also be used in other forms of interaction with partners, such as payments, encashment, and optimized collaboration with insurance companies,” X5 Retail Group CFO Svetlana Demyashkevich said.

The new service gives the client access to a virtual treasurer work station for flexible management of company pools, limits, and positions. An enhanced qualified e-signature and smart contracts are used to interact with the bank. In case of Distributed Treasury and Cash Management, Alfa-Bank offers infrastructural service similar to one of global cloud providers.
“The project implemented jointly with Alfa-Bank and X5 Retail Group shows that the banking market and big business are ready to implement innovative blockchain solutions, and their readiness is rooted both in modern trends and the wish to achieve a tangible business effect by optimizing man-hours and reducing transaction costs. Advantages of blockchain technologies enhance competitive edge of companies and help them retain leadership in their sectors,” Waves Enterprise Development Director Igor Kuzmichev said.

Alfa-Bank (Russia)

ABH Holdings S.A. (ABHH) is a privately owned Luxembourg-based investment holding company investing into several banking groups in the CIS and Europe. ABHH includes Alfa-Bank (Russia), Alfa-Bank (Ukraine), Ukrsotsbank (Ukraine), Alfa-Bank (Belarus), Alfa-Bank (Kazakhstan) and Amsterdam Trade Bank N.V.

Alfa-Bank (Russia), founded in 1990, has developed rapidly to become one of Russia's leading privately owned banks. It provides a full range of banking services — corporate banking, retail banking, investment banking, asset management and trade finance.