SEB, a Swedish private banking company, has announced that it has signed an agreement with distributed ledger technology provider Ripple, in order to use Ripple's blockchain solution for payment transactions.

The announcement said that the collaboration will enable SEB to pilot the Ripple-developed blockchain and the initial step will enable customers to make real-time transfers between SEB accounts in Stockholm and New York. SEB verified that the solution is compatible with the bank's infrastructure and it is on the move to build a complete payment solution.

“This is a way to explore the potential of new technologies and an example of how we, by working with innovative technology companies, can be even more relevant to our customers,” Paula da Silva, head of Transaction Services at SEB, said. “In the next step, we plan to expand the solution to include all geographies and time zones in which we operate.”

The company has planned the first customer transactions for the next year and will be offering real-time transfers with later cut-off times than today.

“By using Ripple's distributed financial technology, our customers can initiate real-time transfers between their SEB accounts in Sweden and the bank’s branch in New York,” Silva added.

SEB has been a part of Distributed Ledger Group along with over 50 international banks to develop common standards for the distributed ledger technology. The bank made an investment in Coinfiy, a Danish fintech company through its venture capital unit in August this year.