CGI Group has become the latest firm to integrate distributed ledgers into an existing payments product, announcing the addition of Ripple Connect to its Intelligent Gateway at Payments 2016 this week.
As with other Ripple partner firms, CGI is seeking to use the startup’s settlement solution to help clients improve the speed and efficiency of financial messaging. Described as a rules-driven, messaging-based router, the Intelligent Gateway was previously used for SWIFT-specific products.
More broadly, however, the integration provides the latest example of how incumbents are leveraging distributed ledgers without the use of digital assets or digital currencies, to bring elements of the technology live today.
Michael O’Loughlin, who leads blockchain development at CGI, explained that one of the main benefits of the integration with Ripple is that it now enables clients to have a wider variety of choices when sending payment information. This, he asserted, could reduce fees and rejected transactions, thereby helping clients cut costs.
O’Loughlin told CoinDesk:
“It’s almost like an intelligent router. When a payment is received by a bank, it can look at it and ask, ‘Is it cheaper and faster and more efficient to send it through wires?’ ‘Do they need it real time?’ With this, you’re giving them an option and adding a new rail with Ripple connect.”
In this way, O’Loughlin explained that the product itself doesn’t use the tech, so much as allow clients to have the option to leverage it when advantageous. For example, he likened the idea behind allowing competition in financial ledgers to allowing Amazon customers the option to receive packages more quickly through services like Amazon Prime.
Santino Failla, director of global payments solutions, emphasized that the product aims to speed up financial messaging by automatically translating financial messages from the different formats used by varying internal and external partners.
“Maybe their format is MT103,” Failla said, referring to the SWIFT messaging format. “We can transform it to Ripple XML, and we can do the reverse. The existing infrastructure doesn’t know that anything happened.”
Failla further indicated that a key value-add of the product is the speed with which it allows users to begin using Ripple’s technology. He said that with the Intelligent Gateway product, clients could integrate distributed ledgers into their workflow in just three months.
By this time, CGI said it is seeking for clients to use the tool as part of proofs-of-concept, and to offer its supporting services as they seek to transition projects to supporting partial and full volumes for real-world payments.
For CGI, the project also represents a step forward in its partnership with Ripple, first announced in November 2015.
Open approach
Still, O’Loughlin sought to frame the move as part of CGI’s progressive approach to technology more broadly. For example, he noted how he believes its approach to design is more open than those in use by competitors.
“The intelligent gateway is truly hub-agnostic,” he said. “A lot of these gateways and routers are sold with an existing payments hub. This can work with a competitor’s code.”
O’Loughlin said that the Intelligent Gateway product is now more “ledger agnostic” than it is has been in the past, a development he framed as just one way CGI is keeping pace with payments modernization.
“We wanted to approach the world in a non-naive way,” he continued. “We’re saying our tech can’t win them all.”
Following the integration, clients will now be able to enable the new tool with the product’s next release, opting into the service. O’Loughlin compared this process to “turning on Wi-Fi” for existing users.
The development follows a beta testing of the product, which O’Loughlin said had received “overwhelmingly” positive feedback.
Value add
As for why potential clients should use the Intelligent Gateway over a direct integration with Ripple, the CGI team stressed that its product would be able to offer a “seamless integration” into existing bank environments, with “minimal disruption”.
Cathy Pin, head of global payment solutions at CGI, stressed that this would be beneficial to clients, who would gain confidence in a technology that many financial incumbents are still in early stages of understanding.
“Innovation is hard for a bank. They are the protectors of identity and value. Along with the software, you want to bring in the right expertise to help the stakeholders who want to engage,” she said. “The tech is the cool stuff and we can all spend hours talking about it, but the behaviors also need to be addressed.”
O’Loughlin went on to stress that the product comes with the benefits of CGI’s experience and ecosystem of tools, which he framed as valuable for institutions given the speed at which distributed ledger tech is evolving.
“We’ve left behind a sandbox where people can plug and play and integrate and play around with the tech. You’re getting the consulting, the methodology, the agile development,” he said, concluding:
“The Intelligent Gateway is bringing it together.”
Money sending via Shutterstock
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.