Banks across Italy are using R3’s Corda blockchain to vastly speed the process of double-checking transaction logs.

Silvia Attanasio, head of innovation at the Italian Banking Association (Associazione Bancaria Italiana or ABI), said both the process of interbank reconciliation and the technology underlying the exchange of data had to change.

In the old system, reconciliation took a long time and was unpredictable. The average time for reconciliation was between 30 and 50 days, Attanasio said. On Corda, reconciliation is completed within a day.

The Interbank Agreement, a part of Italian law that governs interbank transfers, was passed in 1978 and describes a process of banks sending physical tapes. Once the interbank agreement was updated in May 2019 to include data standardization, Italy set a window between March 1 and Oct. 1, 2020, for integration to that standard and a blockchain banks could use to follow the new rules.

Read more: Italian Bank Consortium Trials Interbank Transfers on R3’s Corda

Information technology company NTT Data designed the network and bank technology company SIA operates it.

The project is in phase two with around 85% of Italian banks, or 55 banks total, using the platform to share interbank transfer data. In the third and final phase slated for October, the association expects to have 70 to 100 banks on the platform. 

“The benefit is related to the new standardization more than the technology itself,” Attanasio said. “It’s like the rhythm you set on your metronome that sets a [faster] timeline.”

Before Spunta, each bank had its own software for exchanging data related to interbank transfers, said Demetrio Migliorati, head of blockchain at Banca Mediolanum.

Using Corda for data exchanges between banks was also lower-stakes than moving fiat between banks on a blockchain.

“If we failed in this process, the worst thing that could happen was to have a problem in the information exchange between banks,” Attanasio said. “Clients are not affected, the companies are not affected. It was a natural sandbox.”

Read more: Italian Banks Are Ready to Trial a Digital Euro

The association did consider a centralized database as opposed to Corda but wasn’t open to having banks keep data on separate ledgers at each bank.

Experimenting with something small like data exchange between banks also allows Italian banks to experiment with other use cases. Some banks have begun experimenting with sharing know-your-customer (KYC) information and guarantees of credit on Spunta.

“If we want to do something new for Spunta, we change it immediately and it is changed for all banks,” said Migliorati.