Shirish Wadivkar，渣打集团交易银行部代理行业务全球产品总监，负责银行间清结算与交易的产品战略，推动银行在SWIFT GPI技术、区块链/分布式账本技术以及RippleNet技术的投资和商业化。
Shirish Wadivkar is the Global Head for Correspondent Banking Products for Transaction Banking in Standard Chartered. Based in Singapore, he heads the Clearing & Trade product strategy for Corresponding Banking and drives the commercialisation of the Bank’s investments in SWIFT GPI, blockchain/Distributed Ledger Technology (DLT) and RippleNet.
RippleNet’s core value when it comes to cross-border payments is its “certainty”. With DLT, transactions have a pre-validation step and are instantaneous at both locations, thus providing high certainty and faster deliver for clients.
SWIFT is no longer slow nowadays, with the introduction of SWIFT GPI. However, the technology deployed by Ripple has the potential for a great and bright future for the banking system.
But currently banks are having difficulties reaping the full benefits from the use of DLT. Unlike SWIFT’s international payments where there is standardisation on the data that accompanies the payment，there is currently no such standardisation used across the whole industry.
Using Technology without Cryptocurrency Ripple’s Core Value is “certainty”
JRJC: Can the current application of blockchain technology in the banking sector develop without cryptocurrency? How much cost has been reduced when adopting RippleNet?
Shirish Wadivkar：Ripple is the software – the payment scheme that is created by banks around that to provide robust payment processes and structure is called RippleNet – that is the value proposition.
Having demonstrated Ripple’s applicability in solving real client problems in trade finance and international payments, Standard Chartered conducted several pilots using this technology but without the use of its cryptocurrency (XRP). Ripple offers a product option where transactions use only fiat currency.
As an international trade bank，our role and commitment is to support our clients in facilitating global trade and commerce and provide them with best-in-class service and solutions to do so. While the growth of cryptocurrencies has recently been making headlines, all of our payments between businesses today continue to be transacted in fiat currencies – currency of our clients’ ecosystem and their supply chains hence will remain the primary driver for any bank to deal in any currency.
This service was not launched with an objective of cost savings however the focus was “certainty” in cross border payments using a DLT layer to pre-certify and commit payment transactions across the connected banks in a seamless and irrefutable manner.
JRJC: Blockchain management of financial institutions such as many commercial banks, investment banks, and asset management companies believe that financial institutions prefer to use the world's reserve currency for settlement instead of cryptocurrency. So the reason why Standard Chartered invests in Ripple lies in its underlying distributed ledger technology, right?
Shirish Wadivkar: Yes, we have always maintained that the technology behind cryptocurrencies and block chains – Distributed Ledger technology (DLT) has been our core interest and via RippleNet we use it to drive traceability, visibility and certainty in international payments made in real-time. Ripple’s technology minimizes the risk of failure and deliver and offers end-to-end visibility into every payment by exchanging transaction and fee information before payments are executed.
SWIFT is no Longer Slow Ripple Faces Fierce Competition
JRJC: Can you compare Ripple with SWIFT system? At present, banks in various countries use the SWIFT (International Banking Cooperative Organization) system to transfer money to each other. I heard that the overall efficiency is low, and the rates are high, sometimes up to 40％. And It usually takes 3 to 5 days to arrive. Is that true?
Shirish Wadivkar: As a stable, robust and universally available secure messaging system, SWIFT is perceived to be slow. The traditional way of cross-border payments using SWIFT ended up being “slower” because the numerous hand-offs between banks, their correspondents and use of the respective clearing systems in each country.
But things have changed with the introduction of the SWIFT GPI. Transfers have been much faster, even have it done in minutes or even seconds. Data shows that nearly 50% of GPI payments are credited to end beneficiaries within 30 minutes, and almost 100% of GPI payments are credited within 24 hours, considering the amount and volume that is being transferred in this system, (100 billion USD per day) this increase in speed of payments brings real benefit to a lot of users.
JRJC: What is the biggest problem for Ripple’s current development?
Shirish Wadivkar: Ripple’s advantage and convenience are based on the fact that the point to point transaction must be conduct between banks on the Ripple technology network, and that is not the scenario for the current banking system.
The Cross-chain problem is the real problem Ripple is facing right now. For most of the banks looking to new technology to improve the speed of their international transfers, being on the same ledger is a prerequisite to be able to benefit from using DLT technology. But currently the banks are having difficulties reaping the full benefits from the use of DLT.
In addition, unlike the SWIFT international payments where there is standardization on the data that accompanies the payment, there is currently no such standardization used across the whole industry.
However, with major banks showing tremendous willingness to use the Ripple payment protocol for their own internal transfers and dealings with other banks we believe that there is no version of a future payments platform without incorporating elements of DLT.
Focused on the “Real” Problems Understanding Client Issues Matters Most
JRJC: International transaction settlements usually takes time and efforts, and blockchain tech reduce a lot of intermediate process, does this mean an job cut in tradition financial talents. What kind of talent people are required in the future under the blockchain environment.
Shirish Wadivkar: Technology, including blockchain/DLT are enablers for businesses. What is important for banks to have the ability to understand our client issues and championing solutions in the best interests of our clients. We should innovate to create solutions that best fit our clients’ needs and such innovation is consequently most easy to commercialise – the reason we should invest in any solution in the 1st place, the ability to commercialise it.
We should not be looking at technology as a shiny new hammer seeking nails. Instead, we should be focused on the “real” problems that exist and seeing if blockchain is the right tool, amongst many more at our disposal today and in the future.
JRJC: At present, international standardization bodies such as the International Organization for Standardization (ISO), the International Telecommunication Union (ITU), and the World Wide Web Consortium (W3C) have started standardization of blockchains. The Department of Information and Software Services of the Ministry of Industry and Information Technology of the People's Republic of China has also started a special study on the preparation of the National Blockchain and Distributed Accounting Technology Standardization Technical Committee recently. What consensus needs to be reached among industry stakeholders to implement the industry standardization? Is the blockchain industry standard controlled by administrative orders? Or maybe the power of the market matters more?
Shirish Wadivkar: We shouldn’t question the principles on why standardization is required, and as such these will remain the same regardless of what technology is envisaged to be used at the underlying. The universality and multi-party nature of commerce (regulators and governments included) will drive the use cases on standardization. This will come to use cases where DLT is truly useful too and always as a combination of market forces and multilateral standards bodies.