ABN Amro pilots blockchain in commercial real estate
Amsterdam-based ABN Amro Bank has launched a pilot to explore how its blockchain application Torch can be used in real estate transactions to record and exchange information.
The bank says real estate transactions involve numerous parties, such as buyers, sellers, tenants, landlords, appraisers, notaries, banks, the Land Registry Office, the Chamber of Commerce and regulators. Torch gives all these parties, each in their own capacity, a “reliable and efficient way” to record, consult and exchange information.
In this blockchain pilot, launched by ABN Amro and its technology partner IBM, commercial real estate clients are given the opportunity to enter their lease contracts for properties financed by ABN Amro in the Torch app. The client’s relationship manager at the bank can validate this.
If the property needs to be valued, the bank employee uses Torch to send the necessary details directly to an appraiser. When the valuation report is finished, the appraiser shares it with the bank and the client.
Torch also unlocks additional information from the Land Registry Office and the Chamber of Commerce. The regulator (in this case the Dutch Central Bank, which is responsible for monitoring how banks value and finance commercial real estate) also has access to Torch and to all this information.
The bank says the potential of blockchain lies in the fact that “trust is built into the technology’s design”. In addition, it makes transactions programmable by means of so-called smart contracts. As such, blockchain can offer “efficient, reliable and tailor-made support to multiparty processes”, like commercial real estate transactions – or like logistic processes, an area where ABN Amro has also launched several blockchain pilots.