KPMG is one of the first customers of the ASX’s distributed ledger platform

Devised in response to concern about poorly built apartments, KPMG is set to launch the first commercial use of the ASX’s blockchain technology platform.

The platform will allow banks, insurance companies, regulators and property buyers to check on the “trustworthiness” of a building.

KPMG is set to launch what will be the first commercial use of the ASX’s blockchain technology platform – a Building Trustworthy Index – in conjunction with developer Mirvac, Microsoft and the NSW government.

Devised in response to concern about poorly built apartments, the index will commence commercial operation on January 19 after a testing program that started late last year.

It will allow banks, insurance companies, regulators and property buyers to check on the “trustworthiness” of a building by tracking the source and quality of the building materials and contractors used in their construction.

The launch comes more than a year before the ASX’s long-awaited shift of its CHESS clearing and settlement system to blockchain in April next year – a move which has already been delayed by more than a year due to the Covid-19 pandemic.

KPMG is one of the first customers of the ASX’s distributed ledger platform, being marketed through its new blockchain commercialisation arm, Synfini, which launched late last year.

“There are other companies in various stages of application development, testing and on-boarding (products using Synfini) but the Building Trustworthy Index will be the first,” said Dan Chesterman, the ASX executive who oversees technology and data.

KPMG’s head of blockchain services, Laszlo Peter, said the new platform would create a rating system for buildings that would be available to users ranging from banks and commercial lenders to regulators, insurance companies and others in the construction industry who needed to know whether a building complied with construction standards.

“We are the first paying customer for the ASX’s blockchain technology,” he said in an interview with The Australian.

“We have been using it in the test environment and we are switching it to full strength implementation in mid-January.”

Mr Peter said KPMG’s use of the ASX blockchain technology, which is now being made available to outside users, would be separate from the ASX’s use of the platform for the replacement of its ageing CHESS system.

The index will begin with listing apartment buildings in NSW, but is expected to quickly expand into covering infrastructure.

There are plans for it to be rolled out to other states.

Mr Peter said KPMG had the option of using other blockchain technologies for its building trustworthy index but had chosen to use the Synfini platform because customers were assured about the quality and reliability of a product backed by the ASX.

“We have been working with the ASX on this for the past six months,” he said.

“It has been quite a collaborative process.

“We know we can rely on the ASX – if there are any problems, they will be able to fix it.

“This is what our clients are expecting from us as well.”

The ASX platform was declared production-ready for external customers in November.

Other companies to have signed up with Synfini to use the ASX platform include Broadridge, which is developing an application that automates off-market transfers in the equities market, and Boulevard, which is building an ownership register for private companies.

ASX-listed blockchain consulting company DigitalX is also planning to use the Synfini platform to host Drawbridge, an application that automates the approval process for staff and directors buying company shares.

Mr Chesterman said Synfini was providing the basis for the development of a “diverse ecosystem” of products and services using the ASX’s blockchain technology.

“Synfini has the potential to open up a new world of opportunity for companies, both inside and outside financial markets, to design and build innovative, digital, multi-party solutions on ASX’s world class ledger,” he said.

New York-based Digital Asset has been designing the ASX platform.

Digital Asset co-founder and chief executive Yuval Rooz said it was “great to see customers, like the ASX, using our technology to build additional solutions beyond the original use case”.

He said the launch of Synfini provided an opportunity for other users to develop new products using Digital Asset’s distributed ledger technology.

Mr Peter said KPMG’s Building Trustworthy Index would allow banks and other organisations lending to developers to check on the quality of their buildings.

“They can use it to get access to information about the buildings they are financing or using as collateral for their mortgage book,” he said.

He said KPMG had also been “working with a major bank” over the past year to become involved in the index, but the deal had yet to be finalised.