National Australian Bank (NAB) has today announced an alliance with two global financial institutions, Israel’s Bank Leumi and the Canadian Imperial Bank of Commerce (CIBC). The alliance will look to open up opportunities for NAB to tap into international innovation initiatives and insights, with a major focus on looking at blockchain technology.
Executive general manager of NAB Labs, Jonathan Davey said the strategic partnerships will allow the bank to access ideas, talent, and capabilities of like-minded organisations.
“We want to bring the best solutions from around the world to our customers and this alliance helps us to do that. We see this as an opportunity to jointly develop solutions to problems that are common to our respective customers, leveraging the diverse capabilities that we each bring to the table,” he said.
The alliance will enable the sharing of information and innovative strategies between the three banks. The sharing of these strategies means that NAB will have access to startup partners from Bank Leumi and CIBC, which will deliver the potential for the co-development of products and services.
Davey also explained that the partnerships will help NAB compete against new fintech startups that are every day “challenging the status-quo”.
“We have to not just keep up, but also find ways to get in front. By combining global knowledge and insights we hope to be able to accelerate learning and the development of solutions for our customers,” he said.
To stay ahead of the game, CIBC is using the blockchain technology of US startup Ripple. The startup is the only global provider of enterprise blockchain solutions and is backed by some of the largest tech heavy weights including Google Ventures, Accenture Ventures and AME Cloud Ventures.
In September this year Ripple completed a US$55 million Series B round to accelerate its customer growth and pursue strategic partnerships. The adoption of blockchain technology is yet to be widespread in Australia, partly due to people’s understanding of the tech and the small pool of blockchain talent across the country.
NAB’s alliance with CIBC will allow the bank to use Ripple’s blockchain as a proof of concept of the technology. The two banks will be completing international payment transfers that will not only deliver real-time international payments, but will also improve the security and efficiency of NAB’s payment system.
Blockchain has yet to see a widespread adoption in Australia, however there are a few VC firms and startups backing its use. In April this year Melbourne-based VC firm Trimantium Capital announced it was in the development stage of a potential co-investment into blockchain tech with US firm Winklevoss Capital. Both firms believed it was the right time to leverage off each other’s deal flows to expand the presence of blockchain in Asia.
Phillip Kingston, managing director of Trimantium Capital, said at the time that he believes blockchain will transform a number of industries in a material way.
“Blockchain is significantly underestimated as a threat to central and retail banking but as with most things, people will overestimate its impact in the short term and underestimate over the longer term. This is a little different however, as it is a disruption to governments and banking at the same time,” he said.
NAB is looking to not only leverage the power of blockchain technology but adopt higher levels of cybersecurity. NAB’s partnership with Israel’s Bank Leumi will open a window of opportunity into accessing leading cyber security and data analytics from one of the world’s top startup ecosystems.
“Like NAB, Bank Leumi is the largest SME business bank in its market so we also see a natural alignment there to work on more innovative solutions to our respective small and medium business customers,” Davey said.
The innovation alliance between the three banks will create an open dialogue and will facilitate the sharing of knowledge between key players in global financial markets.
CCO of CIBC, Stephen Forbes said, “We are excited to partner with NAB and Bank Leumi, two highly respected banks that share our commitment to client-focused innovation.
“We have created a culture of collaboration among teams to drive innovation inside our bank, and formed important external partnerships with innovation hubs and fintechs to help us build the bank of the future for our clients. This alliance further strengthens our leadership position in innovation, and broadens our access to global insights and talent in this fast-moving space.”
Image: Jon Davey and Todd Forest. Source: Sydney Morning Herald.