Ripple Enters Strategic Collaboration With CIMB Group
In a recent Ripple Insights article, the company announced that it would be entering into a strategic collaboration with CIMB Group.
The collaboration would enable instant cross-border payments across CIMB’s markets. CIMB would connect with other Ripple customers which would enable them to grow its global payments business quickly.
Talking about CIMB, the article said:
“CIMB is one of the region’s first banks to leverage blockchain technology for speedy and cost-efficient international payments. In a region where these payments have historically been both slow and inefficient, bringing better services has never been more important.”
Crunching some numbers, the company said:
“The World Bank projects that this year alone remittances to Southeast Asia will grow to $120 billion. Additional data from The Boston Consulting Group (BCG) suggests that the size of global market for cross-border payments volume is $27 trillion, and another $20 trillion could be up for grabs between 2018-2026. Approximately 39% of this remittance market is centered in the ASEAN region.”
Moving on to SpeedSend:
“Ripple’s blockchain-based solution has been deployed to enhance CIMB’s proprietary remittance product called SpeedSend. This service allows customers to send and receive money with direct account crediting and instant cash collection. The enhancement improves their access to cross-border remittances across the globe — both inbound into ASEAN and outbound to other countries. It is already enabling remittances to corridors such as Australia, USA, UK and Hong Kong.”
About the collaboration, the CEO of CIMB Group, Tengku Dato’ Sri Zafrul Aziz, said:
“We are delighted to be part of RippleNet and look forward to a fruitful partnership with Ripple by leveraging each other’s strengths and capabilities. This innovative blockchain solution will revolutionize international cross-border remittances, and is a testament to CIMB’s ongoing efforts to enhance its digital banking proposition by providing speedy and cost-efficient solutions to our customers across ASEAN.”
Brad Garlinghouse, the CEO of Ripple said:
“We’re seeing banks and financial institutions from across the world lean into blockchain solutions because it enables a more transparent, quicker and lower cost payments experience. CIMB’s network already spans 15 countries, nearly 800 branches and offers Speedsend — one of the best solutions in the ASEAN region. Now, by integrating Ripple’s blockchain technology, they will enable their customers to send vital funds to family, friends and loved ones more efficiently. With its focus on innovation, CIMB will continue to be a dominant force in the region for years to come.”
Garlinghouse recently had a conversation with the IMF Deputy General Counsel, Ross Leckow, at the Singapore Fintech Festival. Here’s an excerpt from the conversation:
Leckow: From your perspective, what is going on in the private sector? What are the blockchain challenges and opportunities unique to the ASEAN market?
Garlinghouse: Regulatory clarity has a huge ability to drive digital asset and blockchain adoption. It is surprising how many markets still have uncertainty. But, in ASEAN, the regulatory environment for blockchain and digital asset technology is clear.
Several countries have contributed to this, including Singapore, Thailand and the Philippines. In particular, Thailand has introduced a framework that balances consumer protection with innovation. It legalizes several digital assets, including XRP, and provides clear and explicit guidelines for outside blockchain companies to operate.
This clear regulatory environment makes it easier to apply blockchain and digital asset technology to solve real-world business use cases, such as improving cross-border payments across the ASEAN region. The East Asian markets received $130 billion in inbound remittance payments last year alone. They are expensive, and the market is ripe for adoption of new technology, like blockchain, to drive costs dramatically lower.
In terms of challenges, it is true that historically the region has been behind by correspondent banking. Global banks are contracting some of their traditional correspondent relationships, and this is creating more friction in payments in ASEAN.
But some financial institutions are seeing this challenge as an opportunity. Nearly 50% of all of our global customers are based in the region, and our Singapore headquarters continues to be a growth engine for Ripple — expanding by 200% in the past year.