Alex Batlin, the former engineer heading up UBS’ blockchain innovation lab, told CoinDesk that while financial technologies like peer-to-peer lending and crowdfunding platforms are on the rise, it's blockchain technology that could be the biggest threat or opportunity for banks like UBS.
"In principle, it's probably one of the biggest confluences of technology and business right now."
Blockchain has been one of the most awe-inspiring innovations since the Internet came into existence. Blockchain technology basically allows everyone to hold and make transactions as strangers but in a completely transparent manner. There is no mediator in between two people making the transaction, and the entire process becomes easier and cheaper. This concept can be applied to the entire digital world making any kind of exchange/transactions secure (and not just bitcoin).
UBS has set up a "small, agile team" that includes developers, business analysts and project managers inside Europe's largest FinTech accelerator, Level39.
"It's easy for people to come and meet here. You are not asking for people to come to UBS, you are asking for people to come to Level39," Batlin said to CoinDesk. UBS CIO Oliver Bussmann also provides one-on-one mentoring to FinTech startups based out of London in the areas of blockchain & social media analytics. The firm is experimenting in the areas of payments, trading and settlement, and smart bonds.
The UK is fast becoming a hub for companies at the intersection of finance and technology. The country accounted for 42% of Europe's FinTech investment last year while the sector employs more than 135,000 people, many of which are in the capital. Particularly, Level39 is close to Innovate Finance, the FinTech trade association that has strong ties with the government and the Bank of England as a frequent visitor.
Batlin went on to say that some problems could be too expensive for startups to solve. "A team of 12 can accomplish brilliant things, for sure. But some challenges require a level of resource to overcome, which the likes of UBS can contribute and become a valuable partner in this new world," he said to CoinDesk, concluding, "I think the partnership between bigger companies and startups can work really well because we can complement each other."
Interest in blockchain has been coming in from every corner of the world with the major ones being banks and technology providers. Banks’ interest in bitcoin blockchain is seeing a huge uptick with the exploration of potential use cases for the distributed ledger system (blockchain technology).