Bank-backed FinTech platform Lygon is now live

Backed by a consortium including ANZ Bank, Westpac, Commonwealth Bank of Australia, IBM and Scentre Group, Lygon is a new digital platform that uses distributed Ledger technology to transform how businesses obtain, manage and transact on bank guarantees end to end.

Today, some 11,500 retailers in Australia and New Zealand rely on paper guarantees that are created through a manual workflow. They are required by tenants in lieu of cash deposits or bonds to secure lease payments on a rental property.

The Lygon platform creates a digital vault instead of a physical vault and turns a fraud prone piece of paper with a signature on it into a highly secure digital financial instrument, enabling corporates to use a single tech platform for the management of all their guarantees.

Once the application data is submitted, the Lygon platform can issue a guarantee in seconds, rather than the up-to-four week’s long process with a paper guarantee.

The idea for the platform came about in 2017 when ANZ and Westpac Bank discussed common feedback from their property customers about the problems of managing physical bank guarantees.

This led to an investigation of how to digitise bank guarantees. The platform needed to meet the needs of small and large corporates. “From an issuer’s perspective, we had to think about it for the mums and dads and the large corporate end of the Australian market,” said Rodolf Salem, then part of Westpac’s lending products division and now Lygon’s chief operating officer.

Engaging with ANZ, IBM, and a common customer in Scentre Group, the inquiry turned to using a distributed ledger.

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Source: Bank-backed FinTech platform Lygon is now live – InnovationAus