RIZAL COMMERCIAL Banking Corp. (RCBC) is set to launch a remittance service in partnership with two Japanese banks using the blockchain technology for a cheaper and faster way of sending money.
RCBC First Senior Vice-President Manny T. Narciso told reporters on Thursday that RCBC is eyeing to launch a remittance service riding on the blockchain technology for overseas Filipino workers (OFW) in Japan.
“We want to serve the OFWs in Japan through this technology and we’re doing it in partnership with two Japanese banks,” Mr. Narciso said.
“For the OFWs in Japan, [this service] will make remittance faster and cheaper as we will collect less fees.”
By using the blockchain technology, the funds to be remitted will no longer need to pass through other parties such as the SWIFT network, making remittances faster and cheaper, the official said.
“You will not need SWIFT anymore because it’s expensive. Remittance will happen in real time, bypassing all the other parties,” Mr. Narciso explained.
Blockchain is a distributed data ledger which involves a large network of entities where data is stored in “blocks.”
The storage units are continuously updated and being secured using cryptography, making data management and data-driven processes decentralized, tamper-proof and more transparent.
RCBC said it wants to launch the new service in Japan as it is the biggest source in remittances in Asia.
According to the central bank data, cash remittances from OFWs in Japan amounted to $137.43 million in April, the biggest in the region.
Mr. Narciso added that it is looking at partnering with two Japanese banks, with one being the Resona Bank, Ltd.
“We have a partnership already with Resona and we’re looking at them as our first option,” said Mr. Narciso, declining to mention the other bank partner.
The Yuchengco-led lender said it has recent partnerships with Osaka-based Kansai Urban Banking Corp. and Kobe-based Minato Bank of Resona’s Kansai Mirai Financial Group.
RCBC said it will partner with IBM and another firm to provide the blockchain infrastructure.
“IBM has decided to pilot it with 15 banks around the world, we’re the only one in the Philippines that they included in this pilot test,” Mr. Narciso noted.
He added that the lender plans to launch the service before the year ends.
Aside from RCBC, UnionBank of the Philippines is also employing blockchain as one of its underlying technologies to connect rural banks and increase the efficiency of its internal processes.
RCBC, the tenth-biggest bank in asset terms as of end-2017, booked a net income of P1.1 billion, 13.1% higher than the P1 billion logged in the same period last year supported by robust loan growth and reduction in non-performing assets.
RCBC shares went down 1.35% or 40 centavos to P29.15 apiece on Tuesday. — Karl Angelo N. Vidal