Santiago Exchange launched an innovative and world-class fintech application using Blockchain for its securities lending system, thus becoming the first Exchange in Latin America to use such technology in operations. The use of this innovative technology marks a milestone for the Santiago Exchange and the Chilean Capital Markets, as it speeds up the local bilateral securities lending of equities.
"Given that technology and fintech services rendered to the local financial market’s institutions is a strategic pillar of the Santiago Exchange, innovation undoubtedly resides at the core of our development. The first Blockchain technology live application enables us to bring a world class solution and a leading positioning the region, which we hope turns into a real contribution for a better development of the financial and capital markets, bringing operational efficiency and facilitating the execution of our clients' businesses, "said José Antonio Martínez, CEO of the Santiago Exchange.
Securities Lending is the first solution of the Santiago Exchange to use Blockchain technology, as part of the strategic partnership established by the Santiago Exchange and IBM in May 2017 that will incorporate other operational processes using this technology. The solution developed by the Exchange and IBM is based on the Linux Foundation's Hyperledger Fabric open source solution.
"Blockchain has the potential to transform the financial industry in Chile and in Latin America," says Martin Hagelstrom, Blockchain Leader for IBM Latin America. "The Santiago Exchange’s solution is designed to help reduce errors, possible fraud and the processing time of each transaction, while providing transparency and security to the entire business chain," adds Hagelstrom.
The new platform based on Blockchain technology will reduce significantly the time and costs of the management processes associated with the securities lending of shares, in such a way that said reduction constitutes an incentive to increase the participation of this type of operations in the stock market, which currently represent 0.7% of the total transactions that happen on a daily basis on the Santiago Exchange.