Banks are in the process of experimenting with the benefits of blockchain technology to provide commercial-ready solutions and new payment offerings for digitally-savvy customers.

Harnessing the power of blockchain is helping banks to continue a transitional period from traditional to digital-focus and increasing internet privacy and Cybersecurity measures, according to Westpac Institutional Bank head of transactional solutions, global transactional solutions and customer experience, Mike Baldwin.

Speaking at the FST Media Future of Banking and Financial Services conference in Sydney yesterday, Baldwin said that banks were increasingly looking to collaborate with fintech enablers to gain the edge over offering provided by disruptors.

“There have already been a huge number of tests and experimental concept between banks and fintechs,” he said.

“There are big challenges that distributed ledgers can help to solve for our customers.”

Baldwin said that around AUD$20 billion was spent per year in Australian on small person-to-person payments, a figure which should prompt banks to embrace distributed ledgers for simple services.

Banks would look to expand digital payments to offset the lean toward cryptocurrency offerings from disrupters, which Baldwin said would be dependent on the speed with which banks could turn proof-of-concept trials to commercially-ready offerings.

Baldwin said the largest obstacle in the development of distributed ledgers was the balance between cost and outcome for innovating new products to market, as well as falling to the risk of developing  stand-alone solutions with no root problems, rather than searching to create a solution for a pre-placed problem.