Financial Times - Hong Kong | Don Weinland | Oct 18, 2016

Bank of China and HSBC aim to launch property survey database

Bank of China and HSBC are among a group of lenders aiming to launch mortgage services in Hong Kong using blockchain — the decentralised database technology behind the digital currency bitcoin.

So far, Bank of China (Hong Kong) has led tests on a property valuation system for home loans based on blockchain technology, according to Duncan Wong, vice-president of financial technologies at Astri, the government-backed research institute working on the system. He said the bank plans to go live with it next month.

It will use the secure database capabilities of blockchain to provide quick property valuations for mortgage applicants in Hong Kong. At present, when customers apply for mortgages, the banks hire surveyors to value the property being bought. But as different customers shop around for mortgages, the same survey work is often conducted multiple times on the same property.

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Now, blockchain can be used to create a decentralised network of banks and surveyors through which the latest valuations can be listed, verified and shared — in a matter of seconds.

“To the best of our knowledge, this will be the first production-grade [blockchain] mortgage system to integrate with a bank,” Mr Wong explained.

HSBC and several other banks in the city have also “aligned the data requirements to be posted in blockchain”, according to one person involved in the project, although they are yet to finalise plans for joining the system.

BOCHK confirmed it was testing such products. HSBC declined to comment.

Adopting blockchain for banking products such as mortgages represents a major step in the use of new technology for traditional banking businesses. Until now, banks have talked up the potential uses of blockchain but have also kept it at arm’s length, fearing repercussions from regulators.

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