National Australia Bank forms international banking innovation alliance with focus on blockchain technology

National Australia Bank (NAB) today announced it has formed an innovation alliance with two major multinational financial institutions, Bank Leumi of Israel and CIBC of Canada, to create more opportunities for NAB to connect with international innovative technologies, especially blockchain technology.

(Jonathan Davey, Executive General Manager, NAB Labs)

NAB Labs executive general manager Jonathan Davey said the strategic partnership would give NAB greater access to the ideas and talents of other like-minded organisations.

We want to find the best technical solutions for our customers from all over the world, and this alliance will help us achieve this goal. We see this alliance as a great opportunity, because our respective customers often face similar problems, so we can work together to find solutions and create different possibilities.

The three banks will share information and innovation strategies in this collaboration, which means that NAB will have access to the startup partner resources of the other two banks and can eventually develop products and services together.

Davey also said the alliance would help NAB improve its competitiveness given the growing threat from new financial technology startups.

We not only need to keep up with them, but also find the right way to surpass them. By integrating international resources, we hope to accelerate our learning of emerging technologies and develop solutions for our customers more quickly.

To maintain its leading position, CIBC has adopted the blockchain technology solution of Ripple, an American startup. Ripple is the only international provider of enterprise-grade blockchain solutions and has received support from some heavyweight technology companies, including Google Ventures, Accenture Ventures and AME Cloud Ventures.

About a week ago, Ripple received $55 million in Series B funding to increase its customer base and seek more strategic partners. The popularity of blockchain technology in Australia is increasing, partly due to people's increasing understanding of the technology and the shortage of blockchain talent in the country.

The partnership between NAB and CIBC means that NAB can also use Ripple's blockchain technology to carry out a proof-of-concept project. The two banks plan to use blockchain technology to enable cross-border payment transfers, not only to achieve the goal of real-time transfers, but also to improve the security and efficiency of NAB's payment system.

Although blockchain is becoming more and more popular in Australia, there are few venture capital institutions and startups supporting this technology. In April this year, Melbourne venture capital firm Trimantium Capital announced its plan to invest in blockchain technology together with US venture capital firm Winklevoss Capital. Both companies believe that now is the best time for them to use their internal resources. The purpose of the plan is to expand the influence of blockchain in Asia.

At the time, Phillip Kingston, managing director of Trimantium Capital, said blockchain could bring about major changes in multiple industries.

Central banks and commercial banks have underestimated blockchain and viewed it as a threat, while the public has overestimated the changes blockchain will bring in the short term and ignored its long-term impact. However, the reality is different because blockchain will disrupt both the government and the banking industry.

This innovation alliance forms a platform for open dialogue and will promote knowledge sharing among major players in global financial markets.

Stephen Forbes, CCO of CIBC, said:

We are honored to be working with NAB and Bank Leumi. Both are very respectable banks. Through this partnership, we can achieve diversified innovation from the perspective of customers.

Internally, our team culture is one of unity and collaboration, aiming to drive internal innovation. Externally, we build the future of banking for our customers through collaboration with innovation centers and fintech companies. The establishment of this innovation alliance can consolidate our position in the field of innovation, broaden our global vision and talents, and accelerate our development.