Korean, Nordic Banks Boost Payment Transactions With Blockchain

Josh O'Neill

11 November 2016

A large Korean financial institution and a Nordic bank have joined forces with blockchain technology companies to facilitate virtual currency transactions in the near future, a sign of how the banking world is embracing disruptive technologies.

Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already widely known as the platform for cryptocurrency bitcoin.

Seoul-headquartered , the Swedish bank that operates across Scandinavia, has signed an agreement with Ripple, a San Fransico-based fintech company, allowing customers to use its blockchain technology solution as a basis for real-time payment transactions between accounts in Stockholm and New York.

SEB has verified that the solution is compatible with the bank's infrastructure and work is underway to build a complete payment solution, it said in a statement this week. The first customer transactions are planned for next year and will offer later cut-off times in addition to real-time transfers, it added.

“In the next step, we plan to expand the solution to include all geographies and time zones in which we operate,” said Paula da Silva, head of transaction services at SEB. “This is a way to explore the potential of new technologies and an example of how we, by working with innovative technology companies, can be even more relevant to our customers.”

Last month, the Commonwealth Bank of Australia and Wells Fargo carried out what they said was the first global trade transaction between two independent banks involving Blockchain technology.

This publication has contacted both Shinhan Bank and SEB for more details and will update coverage accordingly.