Siam Commercial Bank (SCB), one of the oldest banks in Thailand, has recently announced that using the blockchain platform of Ripple, it has been able to reduce the cross-border transaction time for payments from the initial two days to one-minute duration. The announcement holds significance as this is going to provide the customers with the extra convenience and also act as a spur to other banks in the competition to adopt a similar kind of strategy. According to the official press release of the bank, this step has been taken in order to enhance operational efficiency. The firm has been doing the work on this project since the middle of the year 2018 in collaboration with PTTEP. The press release further elaborated that this project had been conducted successfully on pilot-basis and the bank was able to reduce transaction times from two days to one minute.
Ripple and SCB Association
There is no direct mention of Ripple in the press release; however, it is quite a well-known fact that the bank has been experimenting with the blockchain network of Ripple for quite some time now. It has been using the technology for boosting the speed and efficiency of the processes, and in fact, Phimonpha Santichok who is the Chief Executive Officer and Senior Vice-President of SCB made an announcement last year that the bank had invested in technology platform developed by the Ripple.
Making the things further clear, Ripple went on saying in one of its blog posts that the SCB is the very first institution from the financial domain which has pioneered “multi-hop” key feature of its platform. The speciality of this feature is that it allows the financial institutions to settle the payment even on the behalf of other institutions. This eliminates the need for one to one correspondence between transacting parties which is indeed a very convenient features for all stakeholders involved in the process. Using this feature of “multi-hop”, the SCB will be able to send and receive the payments even without having direct contact with sender accounts and beneficiary institution.
Impact on Blockchain Scenario
The reduction of a time period for the cross border transactions is a very useful feature as it has the potential to attract more customers, especially the ones who regularly send/receive the payments to/from abroad. In addition, this development also bodes well for the diffusion of blockchain technology in the country. Just so you know, the blockchain Adoption in Thailand is on the rise as many companies from across the business domains have started experimenting with open ledger technology. Right from the telecommunication and financial technology to state oil companies and supply chain corporations, everyone is jumping on the blockchain bandwagon to make most of this technology. Experts opine that most of the organisations are turning to blockchain in order to enhance their operational efficiency while reducing time lag and cost factor associated with processes.