Digital Mortgage Certificates Make It to Blockchain

Raiffeisenbank issued the first electronic mortgage certificate that is registered and stored in the Decentralized Depository System based on Masterchain platform*. The innovative technology allows applying the blockchain principles in the regular banking services, making them even more convenient, transparent and reliable.

With this project, Raiffeisenbank replaced a paper mortgage certificate with an electronic security that is stored in the blockchain register. Raiffeisenbank’s primary goal within this pilot initiative was to analyze the business processes behind an electronic securities management and to assess what improvements in the bank’s systems, as well as regulatory and legislative acts, may be necessary for a full transition to a decentralized depository system (DDS). The project will help clients, the bank and the industry to reduce the time spent on mortgage loans approvals, to cut the costs of depository operations and to improve the client experience of borrowers who will no longer have to apply for mortgages in paper.

«The Decentralized Depository System creates an open, transparent environment that allows banks and depositaries to make the mortgage registration process more efficient. The system meets all the requirements of the Russian legislation regarding personal data and information security. Each member of the depository has an access only to specific electronic mortgages owned by this member. Further development of the DDS system will also significantly simplify the securitization of mortgage certificates,» said Evgenia Klimova, Head of Custody Service Department at Raiffeisenbank.

Andrei Morozov, Head of the Mass Market and Credit Products Department at Raiffeisenbank, said: «The process of ownership rights registration previously required the client’s personal visit to the government agencies and bank’s office. A release of the electronic mortgage certificate makes the process completely remote and all the settlements with the property seller are much faster now.»