Santander returns to R3 for FCA mortgage project

Spanish banking giant Santander is working with financial technology group R3 again, alongside the Financial Conduct Authority and RBS, to do regulatory reporting of mortgage transactions on R3's Corda distributed ledger technology (DLT) platform.

Santander, which is not named in the FCA mortgage prototype, turned in its R3 membership back in November of last year, following Goldman Sachs, Morgan Stanley and the National Australian Bank.

A participant at the recent R3 CordaCon said: "Santander is the bank that is working with RBS on R3's FCA mortgages prototype. But they didn't want to be named publicly."

A spokesperson for Santander said: "As a leading financial services provider, we are continually exploring a number of new products and services within the Fintech space.

"We are excited to be looking at regulatory reporting of mortgage transactions using distributed ledger technology which is currently in proof of concept phase."

The bank did not confirm whether it was returning as a paid up member of the consortium.

Obviously banks in the fast moving DLT space are hedging their bets. Santander and Goldman Sachs are both investors in blockchain builder Digital Asset Holdings, headed up by former JP Morgan executive Blythe Masters.

Interestingly, Santander is also a big supporter of Ripple, which uses a tokenised system to connect banks' treasuries, and which R3 is currently locked in a legal spat with.

JP Morgan also left R3 earlier this year to focus on its own blockchain project called Quorum, a fork of Ethereum for enterprise. "Different banks have different business models. Goldman and JP only really engage in projects or initiatives that they can control," said the R3 banking source.

Asked what he thought about the open source Quorum project, he said: "Have you ever heard of JP Morgan doing something and not getting paid for it?"

The FCA mortgage application on R3's Corda platform is able to generate automated delivery receipts for the regulator when a mortgage is booked.

The solution will reduce costs and operational risks by solving data quality issues at source and increasing data consistency, and can potentially be extended to other areas of regulatory reporting, said a statement.

Project participants will continue working with R3 to move towards a live pilot of the application. This will involve engaging with other UK mortgage lenders, the academic community and other regulatory bodies, it said.