Frank Boberach, head of product at Reisebank in Germany, displays his email confirmation of a Ripple-powered payment from ATB Financial
It’s fair to say that history has been made in the banking industry. Recently, ATB Financial — a $43 billion-asset bank based in Edmonton, Canada — sent $1,000 to Reisebank in Germany in only eight seconds, using the Ripple protocol.
$1,000 from Canada to Germany in seconds, not days: the speed of Ripple. Tweet This
ATB and Reisebank were two of the seven institutions to announce last month that they had joined our global network to improve their cross-border payments. The others included Santander, UniCredit, UBS, CIBC, and National Bank of Abu Dhabi.
In an interview with American Banker, Tim Wan, director of innovation at ATB, discussed four advantages to using blockchain technology for sending low-value, high-volume payments internationally: certainty, speed, savings, and access.
“Blockchain provides certainty where at times in networks and transactions, we may not have visibility into the rate and the fees associated, especially if there are multiple banks between each transaction,” Wan said.
Wan demonstrated the power of Ripple by sending a real payment of $1,000 from Canadian dollars to euros to Frank Boberach, head of product at Reisebank in Germany. Frank received payment in just eight seconds, versus the two to six business days that settlement would typically take. An email sent to Frank confirmed the transaction.
Because blockchain technology enables all institutions with the capability of cross-border payments, Wan sees it as the ultimate democratizer. “Now we’re playing on the same level playing field — larger and smaller banks alike,” he said.
Wan stated that in order to remain innovative, institutions need to evolve. Distributed financial technology, such as Ripple’s, is a step forward into the future. “Inherently the technology does offer immutability, reputability and security that our existing database structures don’t provide,” he said.
But the success of blockchain technology will require a new mindset, Wan said. “If instead of starting the question with, ‘but what about,’ you reframe it as, ‘what if,’ then you’re pulling rather pushing an idea.”
Industry leaders are putting real money on the line to invest in fintech innovation. Watch the groundbreaking demonstration in this video.