OCBC Bank has started to use blockchain technology - the latest system shaking up the financial services industry.
Blockchain is a way to store and record transactions and is used for highly secure Web-based systems that process transactions and perform settlements.
OCBC, in a statement yesterday, said it is the first bank in South-east Asia to use the technology. It added that the bank has carried out successful pilots of payment transactions.
These include a cross-border fund transfer between OCBC Bank Singapore and OCBC Malaysia, and a transfer between OCBC Bank Singapore and its private banking arm, Bank of Singapore.
Mr Praveen Raina, OCBC's senior vice-president of group operations and technology, said using the technology to make real-time international payments could "be a catalyst for more banks to adopt the blockchain technology" as it raises efficiency and saves on costs.
The bank said: "For instance, fund transfers between OCBC Singapore and OCBC Malaysia, which typically take up to one day, could be completed in less than five minutes.
"The distributed nature of blockchain's digital ledger removes the need for centralised institutions (intermediaries) and manual processing, which translates to lower costs."
OCBC designed the payment blockchain solution with Singapore firm BCS Information Systems.
The new blockchain platform will allow for inter-bank payments between banks without requiring a payment intermediary.
There are also plans to use blockchain technology for other financial products and service applications.
OCBC said the move was a "commitment to digital innovation", adding that it follows the release of its Application Programming Interface platform - that opens data to third-party software developers - in May this year.