India received the most remittance volume in the world in 2018 at $79 billion, making it a critical and highly desirable corridor for many financial service providers in the Middle East and North Africa (MENA) region. At a recent Ripple Regional customer event for MENA, Ripple’s Navin Gupta led a discussion exploring the origin, launch and learnings from the opening of one such Ripple-powered corridor in between Saudi Arabia and India.
Gupta shared Saudi Arabia British Bank’s (SABB) and IndusInd’s experience launching this new solution, lessons for others seeking to do the same, and what’s next for their new corridor and services.
SABB Powers Up Its Remittance Business
Soon to be the second-largest bank in Saudi Arabia after its merger with Saudi Hollandi Bank, SABB’s Head of Global Liquidity and Cash Management Ghada Al Jarbou said that despite its size, the bank has a relatively low penetration into the regional remittance market, with most customers using third-party independent providers.
This lack of remittance traction was one of the driving factors behind their decision to pursue the launch of a digital remittance product. Last June, SABB was completing its due diligence on Ripple and beginning to frame up its product. The decision to leverage Ripple was validated when the Saudi Arabia Central Bank (SAMA) chose SABB as one of three banks to take part in its own Ripple sandbox pilot.
IndusInd Turns to Ripple for Growth
IndusInd is a midsize bank in India with a robust remittance volume. The bank’s Head of Transaction Banking Sales Amit Talwar said that the sheer size of the Indian remittance market means that many banks outside of the region are looking for local partners.
IndusInd’s dedicated remittance team was looking for a leading-edge technology that could future proof their offering while opening up new geographies and kickstart new partnerships. Talwar noted that from the very start of their work with Ripple, many new inbound partner leads were being generated from banks working with Ripple in other markets.
IndusInd and SABB Launch in Record Time
SABB and IndusInd were a natural fit. Al Jarbou said opening a corridor with India was an obvious choice because India already had a sophisticated payments infrastructure and because the Indian Rupee (INR) was one of the top remittance currencies for SABB.
Once the two found each other, the process moved forward at a quick pace. Talwar said it was roughly one and a half months from the partnership agreement to the first transaction. Al Jarbou observed that the transaction occurred on December 23, 2018 and took seven minutes to complete from end-to-end. He went on to note that current transaction times have already been trimmed to three minutes and should lessen even further over time.
Talwar pointed out this type of bilateral tie-up with a counter-party normally takes many months. But both said the willingness of the involved partners and the support of the Ripple team made this accelerated timeline possible.
Ripple’s Network Effect and Transaction Tracking Advantages
Talwar praised the Ripple team and technology, but said its true power lies in its network effect. He believes that this combination of the network and technology will even allow IndusInd to overcome some of the shortcomings of the domestic payments network. This is critical as IndusInd looks to expand its remittance business using Ripple and become one of India’s leading correspondent banks.
For Al Jarbou, one of the key advantages of Ripple for SABB’s customers has been the tracking and transparency of the technology. Customers have been impressed by the ability to see when transactions are initiated and closed, a capability impossible with legacy remittance products. SABB plans to capitalize on this further by issuing SMS alert updates to customers throughout the transaction.
Al Jarbou said that the next step for SABB will be building up the volume of INR transactions. Beyond that, SABB will begin adding new currencies to its remittance product. The bank plans to work aggressively with Ripple this year to add the next five most popular currencies to its lineup.
Lessons Learned from the Ripple Rollout
Offering advice to the audience, Al Jarbou advised other organizations to gain buy-in from leadership and line up the needed resources ahead of their Ripple rollout.
Talwar expanded on this to say that the world of payments is changing fast and organizations must have a plan. For IndusInd, embracing Ripple allowed the bank to be a first mover and get ahead of that change. By finding a committed partner, leveraging the power of Ripple’s technology and network, and adhering to the vision of becoming a leading remittance partner, Talwar believes the bank is leapfrogging to the front of the market.
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