The CEO of Ripple has defended the fintech company’s decision to host a rival event to the Swift-backed Sibos last month.
In an interview with GTR, Brad Garlinghouse says Ripple’s Swell: The Future Is Here event was not designed to compete with industry get together Sibos, despite being held in the same city (Toronto), at the same time.
Ripple was accused of aggressively hijacking the Swift event, with one media describing Swell as a “Sibos-killer”. A fleet of Ripple-branded cars were parked outside the Sibos venue throughout the week, ready to ferry people back and forth between the two events.
The company, which provides real-time payments via blockchain-based technology, denied that it was trying to poach Swift’s customers, despite the presence of big-hitting speakers such as former Federal Reserve chairman Ben Bernanke and internet founding father Tim Berners-Lee (who also spoke at Sibos).
Garlinghouse says that Swift had no need to feel threatened by the aggressive approach taken by Ripple, so long as it was fulfilling customers’ needs.
“Companies should feel threatened if they’re not solving a customers’ problems. If you’re evolving with the marketplace and solving customers’ problems and helping them be successful, why would you feel threatened? If you’re resisting change and not acknowledging how you’re limiting the success of your customer, then you should feel threatened,” he says.
Speaking on the sidelines of the recent Singapore Fintech Festival, he told GTR that he did not consider the hosting of the Swell event a belligerent tactic, saying that it was “totally appropriate” and that “we’re not trying to blow up the system from the outside”.
He said: “Sibos covers everything, it has 10,000 people or something. We had a 500 to 600-person event and got a lot of great feedback from customers, addressing issues we’re focusing on. We had feedback from our customers that they wanted to hear more from us. A lot of our customers attend Sibos. Our view was these are existing customers, some of them potentially new customers, we wanted to have a deep dialogue with them around blockchain technologies. Sibos doesn’t touch on that as much. We made an effort to ensure our programme was complementary with Sibos.”
Swift is by far the most used payment settlements system in global trade. In 2016, the Swift network sent more than 6.5 billion messages, with an increase in traffic of 69%. More than 11,000 financial institutions use the Swift network, in over 200 countries and territories.
Yet despite its dominance, it has come into the crosshairs of industry upstart Ripple. Ripple’s blockchain network for payments, RippleNet, has more than 100 customers and Garlinghouse says it is on the verge of launching in China, through a local partner. In June, it teamed up with Siam Commercial Bank and SBI Remit to launch the first blockchain-powered payments system between Japan and Thailand. Despite this, its market share is small, but the prospect of instantaneous payments has led to hope that global trade transaction times can be reduced from days or weeks.
In response to the threat from new technology, Swift has launched its own pilot projects on blockchain, led by its global payments innovation (gpi) service, which it describes as “the new standard for cross-border payments”.
Among the founding bank members were ANZ, BNP Paribas, BNY Mellon, DBS, RBC and Wells Fargo. In a show of strength, Swift added 22 further banks to the gpi proof of concept earlier this year: ABN Amro, Absa Bank, BBVA, Banco Santander, China Construction Bank, China Minsheng Banking, Commerzbank, Deutsche Bank, Erste Group Bank, FirstRand Bank, Intesa Sanpaolo, JPMorgan, Lloyds, Mashreq, Nedbank, Rabobank, Société Générale, Standard Bank, Standard Chartered, SMBC, UniCredit and Westpac.
At Sibos, Swift revealed the initial conclusions of its blockchain experimentation, stating that while the potential of the technology is clear, it will not commit to using it yet.
Meanwhile, some in the industry have been quick to defend Swift. Speaking at GTR’s China Trade and Commodity Finance Conference in Shanghai this week, regional director at trade tech company China Systems, called for an end to “Swift bashing”.
He said: “I see a lot of Swift bashing and that’s unfortunate. We are extremely Swift-centric, its accreditation is as good as regulation in some ways. For us, that’s a powerful attribute. I think if we can all work together [on blockchain innovation], it will achieve a lot more.”