UK Finance RLN experimentation welcomed by NatWest, Barclays and others
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UK Finance, the British finance sector trade body, has begun work on a new experimentation phase of the Regulated Liability Network (RLN), envisioned as a ‘platform for innovation’.

Once active, the RLN – in UK Finance’s ideal scenario – will function as a means for UK financial services stakeholders to investigate and test payment, transaction, and liability settlement options.

The platform will function for multiple forms of money, including existing commercial bank deposits and a shared ledger for tokenized commercial bank deposits. The increasing digitisation of British finance and the payments opportunities that are arising from this trend is a key area of interest for the association.

“We are delighted to bring together several of our members to explore an inclusive design for all digital money,” said Jana Mackintosh, Managing Director, UK Finance.

“It is important that the UK financial community works in close collaboration with public sector stakeholders to explore our common objective – to equip the UK with world leading financial infrastructure. Our work is designed to inform the best way forward for all forms of regulated digital money.”

The experimentation phase will include eleven of UK Finance’s members. Results are exacted in the summer, with the phase focusing on three core use cases.

These are payment upon delivery for physical products, with an aim to reduce fraud in online marketplaces; buying homes, looking at improving transparency and mitigating conveyancing fraud; and a digital bond settlement, connecting digital customer money to digital assets.

The forthcoming experimentation phase will examine the areas of customer and business benefits, technical feasibility and the legal framework, with respect to the above use cases.

Participants include the leading payments providers of VISA and Mastercard and some of the country’s biggest banks – Barclays, Citi, HSBC, Lloyds Banking Group, Nationwide , NatWest, Santander, Standard Chartered and Virgin Money. 

Technology support will be provided by R3, Quant, DXC and Coadjute, with additional support from professional services provider EY and law firm Linelaters.

The RLN will essentially function as a sandbox, whereby leading UK finance and banking institutions explore digital payment options – similar but not exactly the same to the government’s digital securities sandbox (DSS). The next phase of experimentation has received a warm reception from British finance.

“We are at a pivotal point in shaping the future of money and asset movement in the UK and beyond,” remarked Lee McNabb, Head of Group Payments Strategy & Research at NatWest.

“The RLN concept provides an opportunity to collaborate openly with peers, regulators and innovators to help understand what that future could look like. 

“Innovation and experimentation are critical to understand what could work for our customers – improving existing journeys to create tangible benefit and change while ensuring safety and simplicity.”

Lee Braine, Managing Director – Advanced Technologies at Barclays’ Chief Technology Office, also said: “It is great to see the financial services industry collaborating to push the envelope of payments innovation. 

“We hope these experiments will provide insights into how a common platform for innovation could enhance customer experiences with new payments functionality and also mitigate the risk of fragmentation in retail payment markets.”

Also welcoming the RLN were Tiina Lee (CEO of Citi UK), Tom Wood (Head of Global Payments Solutions at HSBC UK), Peter Left (Head of Digital and Markets Innovation at Lloyds Banking Group), Raj Dhamodharan (Executive Vice President, Blockchain & Digital Assets, Mastercard), Paul Horlock (Chief Payments Office, Santander) and Tim Moncrieff (Global Head of Strategic Growth Initiatives, Visa Money Movement).

Upon publishing results in the summer, UK Finance plans to host a series of events for stakeholders, including technology companies and fintechs, to explore ways to engage with the RLN as it emerges.