Leading Canadian Bank CIBC is ‘Closely Studying Blockchain Tech’

The Canadian Imperial Bank of Commerce (CIBC), one of the country’s largest banks, is closely studying blockchain technology, peer-to-peer lending, in a time where fintechs are threatening to shake up the financial services sector.

In a speech to the Empire Club of Canada, Victor Dodig, the chief executive of CIBC, said the bank is investigating everything from peer-to-peer lending platforms to blockchain technology, as it is looking for ways to use these innovations for its own benefit.

“We can play in the space,” Dodig said on Tuesday, noting that the bank isn’t afraid of new market entrants.

“Will clients move in droves to these new technology platforms to do their lending? I don’t think so. It won’t happen that quickly.”

Instead of using a “defensive” approach to technology-driven disruptors, Dodig said CIBC is committed to keeping pace with innovation, and is further looking to “[embrace] and [deepen] collaboration and strategic partnerships with outside innovators, [and work] with new tech partners and networks.”

“We intend to be there with our clients as they adopt new technologies and look for secure, easier and more flexible ways to look after their day-to-day banking needs.”

While it is still unknown whether blockchain technology will play a role in how banks conduct business, Dodig said it is important for traditional financial institutions to understand how it works and the level of security it offers.

On Tuesday, CIBC became the first major Canadian bank to participate in Suretap, a mobile wallet that allows Android and Blackberry phone users to store multiple payment cards in a single app and pay at any retailer with a contactless payment terminal.

Through the integration, CIBC clients will be given the option of adding CIBC Visa or MasterCard credit cards to their smartphones to make contactless purchases valued up to CA$100.

Canada’s major wireless carriers Bell, Rogers, Telus, Koodo and Virgin are backing Suretap, which was initially started by Rogers Communications Inc.

As Canada’s biggest telecommunications companies are rolling out a mobile payments app, Apple Inc. said its Apple Pay system will be available in 1 million locations by July, with plans to launch in Canada in November, reported Bloomberg.

“In 18 months time, I think all the relevant participants that have relevant technology that are either in the Android space, in the BlackBerry space, in the Apple space, will play a role in the financial ecosystem,” Dodig said.

He concluded:

“In the end, there’ll be more than just Apple Pay, there’ll be others with their own payment mechanisms. And there’ll be competition there, too.”

So far, 8 major UK banks, including the Royal Bank of Scotland Group Plc, and Lloyds Banking Group Plc., have signed up for Apple Pay. Dodig declined to discuss the state of talks with Apple or Google.

Image credit: CIBC building, Business Financial Post; Suretap Blackberry, TechVibes.