Dilip Rao, Ripple (Asia Pacific)
What Ripple was suggesting was something that could really change the way these transactions are made, globally. I've been in banking technology for 30 years and I thought, ‘I just must be part of this’.
Dilip Rao heads up business development and operations for Ripple across the Asia-Pacific region. He engages with leading banks, regulators and central banks to stimulate innovation on the Ripple platform.
With over 25 years’ experience in senior management with technology multinationals in technical, sales and marketing roles in Asia, he was also the founder of Australia's first person-to-person payments start-up.
Dilip drives business growth via entrepreneurial leadership, business innovation and technology leverage. He has developed and implemented IT Strategy and management restructuring for major corporates, banks and financial services companies including outsourced services.
His academic credentials emanate from science, engineering and business schools in India; holding degrees in Physics and Electrical Engineering with an MBA from the Indian Institute of Management, Ahmedabad, India. In addition to these accolades is Dilip’s business experience across South East Asia, the Middle East, USA, China, New Zealand and Australia.
RFi Group recently sat down with Dilip to talk about Ripple’s literal ‘ripple effect’ across the globe, how industry and consumers are responding to the platform and what is on the horizon for the business.
Dilip met Ripple in the world’s technology hub of San Francisco in 2014, where he had relocated to work with start-ups, connecting them with investors and corporates. As he heard Ripple present their story it began to dawn that this technology was something he felt could change banking, and the world. He laughs, “It could also fall in a heap and die, it was so high risk and ambitious! But at the core, Ripple was trying to change how banking was being done and that was exciting.”
“From the days of the Medici’s (a powerful Italian family of bankers and merchants whose members effectively ruled Florence for much of the 15th century), business people have travelled and needed money to transact where they go – what Ripple was suggesting was something that could really change the way these transactions are made, globally. I've been in banking technology for 30 years and I thought, ‘I just must be part of this’.”
Since Ripple’s formation in 2012, much of the business’s focus has naturally been on developing ideas and taking them to market. 2015 saw the “dropping” of ‘Labs’ from Ripple’s original name (Ripple Labs) and Dilip explains it was at that point they felt they had figured it out. “We could see a clear path to where we were heading”, which is a focus on cross-border payments.
“We deliberately spent a lot of time in the proof of concept stage, really getting under the hood and strategising how the platform would work. As time has gone on, and technological advancements made, those early anxieties around digital currency are fading. One of the biggest of our challenges was explaining that to use Ripple you did not need to use a digital currency, it was simply a distributed technology. It's technically complicated but once the industry became comfortable with the fact that it works, which the pilot and proof of concept work achieved, there was much more faith in moving forward.”
With operations now rolled out across the USA, Europe, South East Asia, the Middle East, India, New Zealand and Australia, Ripple are past those experimentation stages, and Dilip explains 2016 is all about how they build a comprehensive commercial service.
“We are working with early adopters, over 80 banks around the world, including the top ten and actively engaged with four who are currently in commercial production.”
Dilip continues to the huge benefits this adoption will create for industry and consumers alike.
“With the current ‘payments stack’ if you like, the way we view it, is there's a lot of front end and consumer touch in payments. You have Apple, Stripe, PayPal and Square who are all focused on that particular layer and although there is certainly a lot of innovation there, if you go beyond that, it’s clear that your customers do need a provider’s account, their own bank account and often a credit card. Underneath that you have messaging systems, governance, and risk management (he cites Swift as a messaging system) as underpinnings, and down at the bottom of the stack, settlement. That’s the area where we see we can innovate – those deeper layers, not just at the obvious front end.”
He elaborates on the “Internet of Things” as needing the exchange of value to enable transactions. At some point this money of course has to move and the industry needs rails to do that. He continues that that scale is completely different to what we do today. “When you really have machines talking to each other, the volume of transactions can be enormous.”
This is where Dilip sees opportunity for change at the structural level, i.e., decentralized ledgers, the ability for things to be done at huge scale and huge volume without human interaction or intervention. Ripple plans to build for that future. For Dilip, this is fundamental innovation that they believe can then change lives.
This is what Ripple calls the ‘Internet of Value’ which they believe has to co-exist with the “Internet of Things“- moving money and thus creating value, just as easily as it is to move information - and that, he stresses, requires a collaborative effort.
“The needs will be the same, but it’s how we deliver it, that will change.”
“This type of fundamental systemic change - when it costs less, to deliver more – and quickly - can be transformative. This to me is innovation at its true core, something that truly solves a problem. It’s not so much about the “wow moment” the “I had a great shopping experience”. This is true of advanced markets wanting those luxuries. But at the systemic level, say when the lowered cost of sending remittances home can bring about significant and real change in developing economies, to me, this is really exciting.”
As for their global expansion, Ripple sees an increasing appetite from consumers and industry alike to adopt new technologies. Across multiple currencies and complexities of jurisdictions, he stresses you absolutely need something that will be simple and that will work.
“The US for example, has its complexities. Although it's one market with only one currency – there are over 6,000 banks, multiple clearing systems, state rules, federal laws which are challenging. Because they’re such a big market internally, they don't have a lot of focus on cross border immediately. A lot of small businesses in the US don't export at all - it's all in house, whereas in other parts of the world (he notes Australia, Asia and Europe), industry is always looking outside. There is so much export that they must consider cross border transactions from the get-go.”
A positive reflection of the times can be seen in Ripple’s engagement with regulators globally. From a regulatory point of view, Ripple have experienced a keen interest from the relevant authorities to understand new developments, and a thirst to make systems more efficient, which in turn lowers cost and any other systemic risk. In Ripple’s case anything that will create more transparency is viewed in a positive light.
Throughout all stages, it’s been important for the Ripple team to work closely with regulators including the US Federal Reserve, the Bank of England, the European Central Bank, and Reserve Bank of Australia where they’ve felt an absolute degree of comfort that this platform, in the eyes of these organisations, is more than viable. “We get the sense that as it doesn’t break any existing rules, the regulators know the sky's not going to fall on our heads and are saying ‘let’s do it’.”
The Bank of England have in fact just released a White Paper stipulating why shouldn't they be considering all these new kinds of technologies, for platforms like Real Time Gross Settlement. The US Federal Reserve is going through the same exercise he continues, issuing their first ‘Year One’ paper on developments in this space. “It’s been a very collaborative exercise, with a Steering Committee to drive real time payments. Ripple has been elected by our peers to this Committee to represent technology firms.”
Dilip is pleased to share, and RFi Group pleased to hear that Regulators are in fact often leading the way in terms of identifying what needs to change in the global banking infrastructure systems. He cites that the New Payment Platform (NPP) in Australiahappened because the Regulators said they wanted the banks to build it. “Nobody wants to build a new set of roads. They try to use the same old roads, patching it up to use again, because it's a very big ticket investment – so governments get involved to ensure everyone collaborates in these kinds of infrastructural investments. With serious and well-rounded support, this is an imperative.”
Ripple presented at the renowned World Economic Forum in Davos, Switzerland in January 2016 and, perhaps obviously, Fintech’s remain the flavour of the month. Dilip however suggests that the real challenge lies in taking all this excitement and interest, and converting it to real solutions, that solve real problems, with sustainable impact.
Ripple, Dilip explains, is driven to creating change, but, he continues, any technology by itself “doesn’t amount to a hill of beans” unless you can use it to solve a real problem. He is of the opinion that banks and financial services providers are in prime position of tremendous leverage. Touching so many people’s lives they have the ability to make fundamental change to how things work.
He is clearly proud of his work with the organisation and industry, and highlights what keeps him going:
“My role is to engage with banks, get them comfortable with the technology but more importantly, to think about ways they can use it. Typically I say ‘Ok, give me your top three problems and I’ll see if we can solve them.’ We’ve recently worked on a project in Trade Finance and Payments with Standard Chartered, DBS and the Singaporean Government, essentially solving problems of risk mitigation in trade finance using Ripple. We came up with a few ideas and built a POC (Proof of Concept) which is looking really successful. This is what is really satisfying for me personally – I couldn’t have done it without Ripple and this platform (built by people much smarter than I!) but my job is to see if we can leverage it - for real world solutions.”