Transactions So Slick, You Might Slip
Dad jokes aside, this could be a huge deal
We learn by doing, and Blockchain technology is something we are "doing" a lot of. We’ve changed the way international money transfers leverage Blockchain. Now, we’re building systems for maintaining identity records. But we like to keep it in the community, so we’re also using Blockchain to tackle a very Albertan topic… Oil Settlement Day.
Back in the day, Oil Settlement Day was a very cinematic occasion. All the head honchos of the energy industry would meet in one location on the 25th of the month with their chequebooks in tow, ready to settle their scores. It sounds like something out of the Wild West, right? The stakes were definitely high and the dollars (and maybe the ale, too) would flow.
Oil Settlement Day has since moved into the electronic world, but things aren’t working as efficiently as they should. Right now, Oil Settlement Day is a drawn out process that starts a couple weeks before the 25th, with all sorts of reconciling and approvals that must happen so that funds can move on the big day. When the time comes, lots of the smaller companies need to wait for funds to arrive before they can settle their own contracts, so rather than a slick series of transactions, Oil Settlement Day is currently a bit of a clunky muddle. Within ATB, we have a group of employees who manually enter our system to process contract payments and make the money move. So for the oil companies—and for us—there’s a lot of “hurry up and wait” happening.
Time is at a premium, and we know there’s a better way to do this. One that marries trust with immediacy.
We’ve developed a Blockchain proof of concept with the help of IBM that has the potential to make Oil Settlement Day a quick, frictionless and transparent experience for all members involved. It provides a completely secure and private Blockchain system that all participants in the transaction, including oil companies, can access. Upon entering contracts into the Blockchain system, users will have universal and "permissioned" visibility of their own contracts within the system’s ledgers, which means that when Oil Settlement Day rolls around on the 25th, the system can take care of all transactions almost instantly. No more manual money moving at ATB, no more clients staring at their bank accounts waiting for funds to arrive. Just slick transactions happening at a scheduled time but with more trust.
We’re testing the waters with this new and improved settlement process, but one thing is certain: this could have a huge, positive impact both on the oil industry in Alberta (and beyond) and on ATB. It could save time (and therefore money) for our clients, free up some of our staff for more meaningful work, and provide us with a groundbreaking new economic opportunity.