Will Ripple replace SWIFT?

It’s a big week of FinTech in Asia with Money 2020 China and the Singapore FinTech Festival (SFF) all taking place in the same week. One of the headlines emerging from SFF was an interview with Brad Garlinghouse, CEO of Ripple. The headline is from a Bloomberg interview and reads:

Ripple Is Aiming to Overtake Swift Banking Network

“The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market,” Garlinghouse said in an interview with Bloomberg TV on the sidelines of an event in Singapore. “Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”

Now I find it interesting that Brad says this but, then again, I’ve heard it quite often. In fact, people having a pop at SWIFT has been pretty much standard since the turn of the century but, like the FinTech debate about start-ups destroying banks, it’s not going to happen. In fact, it’s more of an aspiration for many in the technology world to want to see these things change, than a reality. However, it is interesting to read the comments on LinkedIn that relate to this article.

No surprises here.  SWIFT is a clear target for disruption. Says consultant Kevin Maloney.

If not now and not by Ripple ( doubt they are mature at that scale yet), someday swift will be disrupted by cryptocurrency. Says director Tanmoy Ghoroi.

Love it. Says wealth advisor Sean Mahoney.

And so on and so forth.

The reason I claim it won’t happen for the foreseeable future, is that the SWIFT network is a co-operative owned by over 11,000 banks in 200 countries. If they wanted to replace that network with Ripple, then SWIFT would buy Ripple. Equally, Ripple has 100 customers who say that Ripple is appropriate for correspondent banking. Well, SWIFT has 10,900 who are not there yet. In addition, SWIFT has been experimenting with blockchain for most of this decade through innotribe, and has developed proofs of concept in partnership with firms like ChainLink, so they’re not exactly sitting back on their laurels and letting Ripple take away all that business.

This is why there are many just as interesting comments in support of SWIFT on LinkedIn.

Is the Ripple network ready to handle the transaction velocity that is required to support inter-bank transactions across 10,000+ banks and settle across multiple entities. Says banking and payments leader Abir Bhattacharya.

Never forget that SWIFT is  cooperative owned by BANKS. Says Treasurer Guillermo De La Fuente.

Is "LOL" ever an appropriate comment on Linkedin? Says Head of Transaction Banking Kjeld Herreman.

So I don’t know. I guess I’ve been around long enough to see everyone throwing rocks at established institutions from the large banks to their large bank infrastructure, and yet I haven’t seen any of those large banks or their infrastructure being destroyed … yet. Will it happen in the future?

My heart says there are many who wish it would, but my head says it won’t happen. It will be interesting to check back on this blog in five or ten years and see if it came true.