LONDON (Reuters) - HSBC has reduced the cost of settling foreign exchange trades by a quarter through its blockchain-based system, an executive overseeing the project told Reuters, offering a glimpse of the savings the technology could offer banks.

FILE PHOTO: The HSBC bank logo at the bank's offices in the Canary Wharf financial district in London, Britain, March 3, 2016. REUTERS/Reinhard Krause/File Photo

The bank processes between 3,500 and 5,000 trades a day on its “FX Everywhere” system, settling trades worth $350 billion, Mark Williamson, chief operating officer of FX cash trading and risk management, told Reuters.

The HSBC platform is a rare example of blockchain technology being put to practical use by a major bank. Last month the London-based lender said it had processed FX trades worth $250 billion on the platform since February last year.

The fresh details of the scale of the HSBC project suggest that the potential of blockchain to make significant cost savings in the financial services industry - long touted by its proponents of the technology - is being realized.

“We going at a pace now,” Williamson said. “We’re able to demonstrate that this is not a one-off proof of concept or just one or two trades.”

HSBC would not give data on overall forex trades settled by traditional processes, saying only that those settled on the platform represented a “small” proportion.

Supporters say blockchain - a shared database that can securely process and settle transactions without the need for third-party checks - could transform industries from finance to real estate by obviating cumbersome and inefficient processes.

That hype, though, has rarely been backed up by examples of large companies moving beyond tests on a limited scale.

Financial institutions have so far taken a cautious approach with the technology originally conceived to underpin of the bitcoin cryptocurrency. Many are concerned by uncertainty over security, regulation and the impact on existing systems.

HSBC coordinates payments across its Americas, Europe and Asia Pacific trading hubs on the platform, a type of blockchain known as a “shared permissioned ledger”, which allows approved multiple parties to amend and update in real time.

Williamson said that HSBC settles “billions of dollars” worth of payments every day, helping the bank to manage risk by allowing it to see real-time exposure across multiple balance sheets.

He did not give precise figure for daily transactions but said that a significant amount of overall internal flows are likely to be settled on the system.

The bank is aiming to provide the tools to corporate clients with complex, cross-border forex flows.

“The more participants that you have joining the HSBC shared permissioned ledger and the ecosystem, the more efficient we’re going to become in providing services to our clients,” Williamson said.