According to Ripple, 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. During a Ripple Regional customer event for MENA, Ripple’s Navin Gupta led a discussion exploring the origin, launch and takeaways from the opening of one such Ripple-powered corridor in between Saudi Arabia and India.
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 stated, “Despite our 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 our 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 is a midsize bank in India with a robust remittance volume. The bank’s Head of Transaction Banking Sales Amit Talwar said “ 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.
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.
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.
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.
