by Diana Ngo
Infoteria Corporation, a Japanese firm that creates enterprise software products, is teaming up with Dragonfly Fintech to develop blockchain-enabled solutions aimed at enhancing payment, clearing and settlement solutions for the financial services industry.
The two companies have signed a Memorandum of Understanding to pursue the partnership. The collaboration will consist in using Infoteria’s data integration software ASTERIA to create a “more user-friendly” version of Dragonfly Fintech’s Transaction Ecosystem Platform Solution (TEPS).
TEPS is a private blockchain running on Mijin, a platform developed by Japanese startup Tech Bureau. TEPS, a platform-as-a-service solution, is an “enabler” that can be integrated into core banking systems. The solution allows ecosystem players such as financial institutions, service providers, merchants and end users to make payments, and clear and settle trades instantly.
“The proposed partnership will allow TEPS to fast track the development of value-added Business Intelligence analysis, operation automation, as well as using it as a tool for Anti-Money Laundering analytics for a holistic offering,” Dragonfly Fintech said in a statement. “It takes away the need to understand the steep learning curve of the blockchain technology and jumpstart the use and integration of TEPS into core banking systems.”
The collaboration announcement comes simultaneously with the news that Dragonfly Fintech, a Singapore-based blockchain infrastructure developer, successfully completed a three-month long demonstration experiment with SBI Sumishin Net bank and Nomura Research Institute (NRI).
The trial, which debuted in December 2015, consisted of replacing SBI Sumishin Net bank’s ledger systems with the Mijin platform.
The demonstration experiment was conducted in a simulated environment with 2.5 million virtual bank accounts capable of processing 90,000 transactions every hour. The network was composed of six nodes.
The experiment happened to be a success and, according to Lon Wong, founder of Dragonfly Fintech, “shows that blockchain can be used for the core banking system.”
“The Mijin/NEM Technology makes it easy to integrate with the core banking system. In fact, it should coexist with legacy core banking systems, run in parallel, and finally replacing them in the long term,” Wong said.
After the collapse of Mt. Gox in early 2014, Japan’s cryptocurrency industry had been struggling to take off. But since the end of year 2015, a number of Japanese banks and financial institutions have started expressing their interest and even experimenting with blockchain technology.
In February, Japan bourse operator Japan Exchange Group Inc. announced a partnership with IBM to start testing blockchain technology for financial transactions.
Mizuho Financial Group, one of Japan’s largest financial holding companies, is involved in several blockchain projects, one of them being the development of a blockchain-enabled record-keeping system for documents in collaboration with Cognizant.
In March, FISCO Ltd., a leading financial analyst services provider in Japan, announced the establishment of FISCO COIN Ltd., a new company that would be the operator of an exchange platform for bitcoin and other cryptocurrencies.
The news followed the bullish proposition from Japan’s financial regulators to handle virtual currencies as methods of payment equivalent to conventional currencies.