Commonwealth Bank of Australia to Integrate Ripple for Instant Settlements

"Big four" Australian bank, the Commonwealth Bank of Australia (CBA), has announced its plans to integrate Ripple and use the distributed network to transfer funds between its subsidiaries.

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Commonwealth Bank of Australia to Integrate Ripple for Instant Settlements

"Big four" Australian bank, the Commonwealth Bank of Australia (CBA), has announced its plans to integrate Ripple and use the distributed network to transfer funds between its subsidiaries.

Speaking during a presentation at a forum organized by the Australian Information Industry Association, David Whiteing, CIO at CBA, said that the bank has been "testing crypto protocols" and is about to "begin a wider experiment with one of our offshore subsidiaries."

The purpose, Whiteing continued, is to "explore the benefits of intra-bank transfers using these protocols."

David Whiteing, CIO at CBA

He stated:

"The idea is to test in a controlled environment what a bank-to-bank internal transfer might look like using crypto rather than existing payment providers."

Whiteing qualified open ledgers, such as the Ripple protocol, as the "way of the future" for global money transfers, adding that the payments industry is ripe for innovation:

"If you look at payments protocols today, they are 40 years old, so they are very old technology that are highly susceptible to being compromised."

Digital banking

The Ripple network, which will be used to make instant and frictionless money transfers, is part of CBA's wider plans of building up its position in the digital banking era.

Speaking to the audience, Whiteing pointed out the growing use of mobile apps, stating that one third of CBA customers choose the mobile app or the website as their primarily point of interface. He further said that 46% of all transactions were processed over the Internet.

Whiteing cited to case of Africa:

"In this economy and through Africa, with a population of about 1.2 billion in the continent, mobile inclusion is greater than 100 percent. There are more mobile devices than there are people in the population."

In February, the bank strategically acquired South African Tyme Capital, a startup that builds digital banking solutions.

Commenting on the acquisition, CBA group's CEO Ian Narev, said:

"Tyme gives us new opportunities in our emerging markets footprint, as well as providing capability to enhance innovation in our core markets. In terms of the group specifically, we will continue to invest in our current strategy."

Ripple Labs, the creator and developer of the payment protocol, has so far managed to conclude deals with two American banks Cross River Bank and CBW Bank, and German Fidor Bank AG.

In April, the company announced it had set up an office in Sydney to focus on the Asia-Pacific region. The move was to "[respond] to the growing demand for Ripple's real-time settlement protocol in the region," the company explained.

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