The Royal Bank of Scotland is implementing a Proof-of-Concept with Ripple technology for automated bank transfers. The bank plans to invest £3.5 million in its broad-scale two years transformation plan focusing primarily on the IT system resilience.
At McNamara’s slide desk Ripple is listed alongside 23 other companies under the Proof-of-Concept section. Two other cryptocurrency businesses, Coinbase and Blockchain, are also mentioned in the “pipeline of ideas” at a “qualification” stage.
Addressing RBS investors McNamara referred to “hundreds of millions of dollars being invested into Blockchain initiatives” in the United States. He said:
Last November, RBS team won the Deloitte Digital #GoneHacking capital markets hackathon with a trading platform based on the Ripple protocol. RBS used the technology to add several cryptocurrencies including bitcoin, litecoin and XRP onto the FXMicropay service. The team also explored the possibility of using Ripple and blockchain to replace the existing banking and Swift-based infrastructure.
According to McNamara, modern banks face the dilemma of whether “to ignore or to engage” the disruptive technology. And the growing number of financial institutions opts for engaging. As CoinFox reported earlier, in April the Bank of New York Mellon announced it started experimenting with the blockchain. In June, the Commonwealth Bank of Australia stated it was going to use Ripple to transfer payments between its subsidiaries. Two other banks from the Australia's 'big four', Westpac Banking Corporation and the Australia and New Zealand Banking Group, followed its example shortly afterwards. LHV bank Estonia and a Colored Coins software company ChromaWay AB created a new blockchain-based platform and a wallet for P2P transactions in Euros. Last week, BitPay’s CEO declared that his company was going to work on pilot projects with several major banks. And this week saw Bitcoin exchange Safello reaching a Proof-of-Concept agreement with Barclays bank on bitcoin payment platform.
A recent paper from Santander Innoventures suggested that the blockchain technology may save banks $15-20 billion a year.