Switzerland-based financial services giant UBS is expanding into China with the opening of a new “Business Solution Centre”. According to a Shanghai Daily interview with COO Axel P. Lehmann, the bank is also investing in financial technologies like blockchain.
Also read: Coinbase Will Oppose Government Petition in Court
UBS Group Business Solution Centre in China and Blockchain Technology RD
Blockchain technology has become a prospect for many financial incumbents worldwide. Recently UBS executive Axel P. Lehmann detailed the bank’s expansion into China and its interest in distributed ledger protocols. UBS has created a new business center in the Jiangsu province city of Wuxi, employing 200 people focused on innovation. During the interview, Shanghai Daily asked Lehmann how UBS feels about blockchain applications.
“UBS sees potential in blockchain technology, but it will take some years before you see meaningful and successful commercial applications,” said UBS group COO Axel Lehmann. “In the next five to 10 years, when it comes to the potential application of so-called “public blockchain,” what you will see is more companies and government institutions using blockchain to facilitate information sharing. But on a broader scale, it will take time for people to see the benefits of its full deployment.”
Like many traditional financial service operations, UBS has seen blockchain’s potential for quite some time. In March 2015 the bank launched its Crypto 2.0 Pathfinder Program and said for the past eighteen months it has been “studying blockchain intensely.” The bank also revealed a non-technical white paper to describe to clients what blockchain can accomplish.
Blockchain Pilots and Smart Bonds
During Lehmann’s interview, the executive also details the bank’s creation of blockchain-based pilots. he explained UBS Group has already developed several pilots using the technology. One example Lehmann described is the issuance of “smart bonds” and loyalty rewards settled with cryptocurrency.
“Most recently, we announced a partnership with three banks plus technology companies to further explore what we call the “utility settlement coin,” a concept that helps to translate bitcoin-like money and link it back to real-time central bank money, like US dollars, Swiss francs or renminbi,” says Lehmann.
Furthermore, the Swiss bank revealed its blockchain prototype at this year’s Sibos event in Geneva. The project was built using the Hyperledger Fabric protocol with assistance from IBM. The prototype uses smart contracts to streamline multiple financial processes, UBS’ innovation manager Alex Batlin told CIO Journal.
Monopolizing New Technology?
The Shanghai Daily concluded the interview by asking Lehmann what his opinion of people accusing banks of “trying to play monopoly” on blockchain innovation. Lehmann says he doesn’t believe that’s the case and it could be seen as the other way around. “You could view blockchain technology as a kind of taking-over part of the value chain that banks are providing,” he explained.
“On the other hand, it’s a great opportunity to make the banking and financial system much more effective, efficient and safer. In this regard, it’s a very important area for us to invest in to improve our overall value offering. So we are cooperating with our own in-house innovation labs as well as promoting an open architecture to share our information and data.”
Lehmann said one of his top priorities for UBS is “innovation and digital operation.” It seems the UBS executive and his firm see many benefits with blockchain and finance. The financial establishment has been one of the earliest supporters of this technology and it looks like the bank will continue its effort towards capturing distributed ledger innovation.
What do you think about the UBS executive’s statements towards blockchain technology? Let us know in the comments below.
Images courtesy of Shutterstock, Pixabay, and UBS Group websites.
Have you seen our new widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool, and you can customize by size and color. The widgets include price-only, price and graph, price and news, forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.