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IBS Journal March 2016


their uncertain tax status or distant asso- ciation with an institution on a watch list. To overcome the technical challenge some banks have taken to getting waivers from customers in order to be able to use their data for compliance purposes outside of the jurisdiction. Fundamentally a resolution is needed at the legislative level.


“If you look across most global insti- tutions they will generally have some exceptions to a process based on legal or confidentiality regulatory constraints,” says Wicks. “Is there a dissonance between the requirements of law and what you would require in terms of compliance? I think there does tend to be. For example, Europe


has developed the single European pay- ment area but from an AML perspective a payment between two countries within the European Union, even with the Euro as a currency, would be considered to be cross border.”


Dan Barnes


RBC teams with Ripple on blockchain project


Royal Bank of Canada (RBC) is working on a new distributed ledger proof of concept, using Ripple technology. The project is dis- cussed in a Deloitte Tech Trends publica- tion in which the company notes that a couple of years ago RBC began looking for technologies that could help it develop a new approach to cross-border transactions. “At that time, many people in our


industry were exploring possible uses for Bitcoin,” says Eddy Ortiz, RBC’s vice presi- dent, solution acceleration and innovation. “As we came to understand more about the challenges we faced, we realised the underlying technology powering it was what was particularly exciting.” After researching numerous


shared-ledger technology options, RBC set-


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tled on Ripple, which makes it possible for financial institutions to send and receive cross-currency payments more efficiently by connecting banks directly to eachoth- er via distributed financial technology. As transactions are immutable and carried out in real-time (five seconds), Ripple can also help mitigate fraud, credit, FX, and coun- terparty risks. In addition to this project, RBC is


exploring other distributed ledger use cas- es. One option involves creating a loyalty platform in which the bank engages cus- tomers in real- time through a blockchain to help them better understand the points and rewards they are accruing as they use its products and services. Likewise, custom- ers will also be able to engage directly with


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a variety of RBC partners via the block- chain for real-time redemption of reward points. “Our customers will be able to see their points accrue each time they use their RBC credit card,” says Ortiz. “And the reward points become like liquid cash, enabled by blockchain.”


Scott Thompson


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