Chinese conglomerate Ping An Insurance is applying blockchain-driven smart contracts across the full range of its operations.
According to a report from Sina all eight of Ping An’s banking, securities, fund and property subsidiaries are making use of the ALFA smart contract cloud platform recently launched by Ping An’s fintech vehicle OneConnect.
OneConnect’s smart contract cloud platform provides contract templates for different sectors and a contract database, while also using API for seamless integration with the operating systems of user, in order to enable them to achieve bespoke, standardised contract management.
The contract database covers the seven sectors of banking, funds, securities, trusts, leasing, futures and insurance, providing over 100 standardised contract templates and over 80,000 labels which are all stored within the blockchain.
The ALFA platform also records the entire contract drafting, editing, execution and implementation process on the blockchain, with each of the contract parties serving as blockchain nodes.
“In the past when drafting contracts, it was normal to fill in two or three pages of information,” said OneConnect’s general manager assistant Huang Shaoyu (黄绍宇). “A single ABS management plan would need two people to work on it for around two or three weeks.
“Following the launch of the smart contract cloud platform, one person can complete item entry within just half an hour.”
“At present ABS transaction assets that make use of smart contracts have reached the level of hundreds of billions of yuan, and the labour hours required for document creation have been reduced by 85%,” said OneConnect’s Fan Ling (潘玲).
“In the general sense of the term e-contracts are standardised contracts for certain operations scenarios that are based on the blockchain, ” said Huang.
“We, however, focus on the standardisation of transaction contracts between banking, insurance and securities financial institutions, and between institutions and end clients.
“We are backed by the natural advantages of the Ping An Group’s full licensing, with complete operations scenarios and an historical accumulation of contracts.”
“When formulating contracts, different operating entities and scenarios will require different data sources and operations experience,” said Fan Ling.
“China Ping An is a fully licensed financial conglomerate which is familiar with many financial scenarios.
“At present we have solutions plans for seven or eight sectors, and we will gradually integrate the data required for each sector.”
OneConnect estimates that the platform will help institutional clients to increase the efficiency of the contract drafting processing four-fold and operational management efficiency two-fold, while reducing operational risk by 80% and labour costs by roughly two-thirds.
The platform is expected to prove especially useful for financial products with complex transaction structures that are difficult to standardise, and interbank transactions in particular.
“For example, when I was with the interbank department, our contracts were certainly standardised, and following internal legal and compliance review would become the bank’s own,” said Huang.
“However, the legal departments or operations departments for the bank serving as the counter-party to the transaction would always amend some of the provisions of our contracts – this is normal.”
The smart contract platform helps to standardise cross-institutional contracts by automatically filtering through provisions that have a high probability of being amended, and producing standardised versions of the remaining provisions for which there is general consensus on the market.
[…] conglomerate Ping An Insurance is applying blockchain-driven smart contracts across the full range of its operations—banking, securities, fund and property […]
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