Royal Bank of Scotland (RBS) has made some warm overtures toward cryptocurrency as part of a renewed focus on innovation, made in response to a series of technology issues that have further weakened its reputation.
The past decade has been a rough one for the bank, at one point the world’s largest by assets held, now 17th. Among other British banks, it was hit hard by the 2008-09 financial crisis. Following a £20 billion bailout by the UK government, taxpayers became owners of 84% of the bank’s shares, which will now reportedly be divested at a loss.
The latest mishap involved the disappearance of 600,000 payments worth millions of pounds, which were cleaned up after three days. This follows the 2012 incident where a failed software update resulted in millions of customers unable to access cash or make payments.
Despite the bank investing £150 million annually to make its systems more resilient, it cannot rule further mishaps in the future since “it is not feasible to run 100% faultless systems.”
The bank has also paid over $1 billion in fines due to its involvement in the global forex rate rigging scandal.
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The aforementioned £150 million is part of a £3.5 billion initiative dedicated to “addressing legacy issues, improving automation of core processes and innovation.”
One of the activities will be the investigation of the Ripple protocol, a “disruptive international currency payment technology”. Four tech teams from the bank will collaborate on how the protocol can be integrated with the bank’s infrastructure. RBS would join at least a half dozen other banks that have either already implemented Ripple or are considering it.
This past February, the bank’s Technology Solutions Centre (TSC) hosted ‘Creative Currencies Chiasma 2015’. It allocated up £20,000 per team to transform concepts from the intensive 2.5-day event into viable business ideas.
The event highlighted how Bitcoin is more than just a medium for carrying out anonymous or dark net transaction, its organizers stating:
“Cryptocurrencies offer a philosophical departure from conventional currencies, potentially radically reshaping the power structures of contemporary banking by sidestepping the need for traditional banking structures.”