R3 unlocks regulatory reporting on Corda with Financial Conduct Authority and two global banks

12 September 2017

Enterprise software firm R3, the Financial Conduct Authority (FCA), RBS and another major global bank have built a prototype application for regulatory reporting of mortgage transactions on R3’s Corda distributed ledger technology (DLT) platform.

This unique collaboration between two major banks and a national regulator demonstrated how DLT’s shared data model can enable continuous regulatory reporting for financial institutions. The application is also able to generate automated delivery receipts for the regulator when a mortgage is booked.

The application was built on R3’s Corda platform, a financial grade distributed ledger that records, executes and manages institutions’ financial agreements in perfect synchrony, with point-to-point communication to ensure the privacy required by participants in wholesale financial markets. 

Corda’s unique technology allows the application to provide a single, immutable record of mortgage transactions and interpret regulator rules on a distributed ledger, delivering the following benefits:

  • Significant reduction in cost and potential to rationalise people, processes and systems
  • Reduction in operational and reputational risk by solving data quality issues at source and increasing data consistency
  • Potential to extend the solution to other products and regulatory reports, as well as other areas of mortgage operations

Project participants will continue working with R3 to move towards a live pilot of the application. This will involve engaging with other UK mortgage lenders, the academic community and other regulatory bodies to showcase the prototype and receive feedback for shaping a production-ready version.

David Rutter, CEO of R3, comments: “We have engaged with hundreds of regulators across the world since the outset of R3. Our members are some of the most heavily regulated institutions in the world, and so streamlining and improving regulatory reporting has been a key consideration as we develop Corda. Bringing regulators and banks together in projects like this is the only way to develop effective, futureproof solutions that meet the needs of all parties involved.”

Richard Crook, Head of Emerging Technology at RBS, comments: “This project has shown that distributed ledger technology, and specifically the Corda platform, can give the regulator a new tool capable of overseeing mortgage activity much more quickly and efficiently than before whilst greatly reducing data inconsistencies. This also streamlines our business, enabling us to simplify our processes and deliver better experiences for our customers”