Sibos Blockchain Panel

It was standing room only for those interested in blockchain

Don’t take your eye off the ball is the message coming from some of the new faces in the blockchain space.

This morning, at Sibos 2015 in Singapore, the ever-present blockchain trend was discussed by Innotribe with its ‘New kids on the block(chain) platform’ session.

The moderator, Mark Buitenhek, global head of transaction services at ING, oversaw a panel of eight. The event was of such interest that the original (and rather small) room was packed out with 100 people; and about 200 hundred more people had to watch the event from a live feed. The delay of 12 seconds on the feed failed to hamper the audience’s genuine desire to learn more.

Buitenhek kept the lively discussion moving well, and he spoke of how the era has moved from one of ‘disbelief to engagement’.

He believes the jury is still out on the merits of blockchain and wondered if the panel thought it was a genuine solution for improving financial transactions.

Adam Ludwin, co-founder and CEO of Chain.com, says people have to look at the industry as a long game. Like others before him (see IBS Journal October 2015 and an interview with Peter Shiau at US-based Blockstack), he thinks it is a good solution but patience is needed. His company has also received money from Fiserv, Visa and Nasdaq, so they clearly believe in him.

For Joyce Kim, executive director at Stellar.org, blockchain’s low costs can help the world’s poor. Her non-profit organisation is seeking to help people – typically those ‘who survive on five dollars a day’. She thinks it is a solution for the greater good of humanity.

Oliver Bussman, group CIO and group MD at UBS, represented a more traditional voice in the industry. While he acknowledged blockchain’s merits, he did point out that bank’s processes have been in place for hundreds of years. They have worked for some time.

Simon Taylor, vice-president of blockchain R&D at Barclays, sees it as an ‘exciting’ solution but feels it is ‘massively misunderstood’. He sees it as a technology for reconciliation and not payments, a view at odds with most others on the panel.

But as he says: ‘If you ask ten different people about blockchain, you will get ten different answers’. As way of an explanation, he says it is best to look it as a protocol – such as Java or the internet.

Neal Cross, CIO at DBS Bank, was part of the ‘yes it’s a solution’ brigade and adds that blockchain is the ‘next big thing’.

The look of love

Well, perhaps it’s so far, so predictable. Anybody with a vested interest in blockchain is going to back it.

But Buitenhek wanted to get the audience’s views and asked ‘how seriously is your organisation looking at blockchain technology?’

[contextly_sidebar id=”2EcH1s4nfvtzdbjzzKBX6uRIywlujaeT”]

While the panel were players in the blockchain space, the crowd were looking in and wondering how to react to this new entity. The result showed that 32.1% were ‘just monitoring’ with 25% ‘actively engaged’.

With that in mind, the discussions moved on to whether banks were ready for the potential new order.

Bussmann believes they are ready. Some banks are engaged in analysis and trying to understand more. He thinks they need to ‘team up’ with blockchain firms and set up some industry standards.

When an audience member asked what UBS’ perspective on blockchain is Bussmann says they are in the ‘experimental’ stage. No other specifics were provided but UBS is aware that market entrance costs are low for these start-ups – and so a real challenge to the old guard.

Some may feel the panel’s answers are overly simplistic, but it must be remembered they were speaking to an audience that had to be convinced. And to be convinced they have to fully understand.

Warnings and worries

Away from readiness, other issues were briefly looked at; and with such a large panel and a limited amount of time, things were invariably skimmed over.

Cross made a point that when new technologies arrive there is a tendency for them to be used to ‘retro-fill’ – meaning they fix past problems when that wasn’t their intended goal. He thinks blockchain will appeal to many companies because it has low operational costs and it doesn’t need people.

Kim also noted that blockchain hasn’t undergone enough ‘stress testing’ yet. It needs to prove it can ‘handle scale’ and firms need to ‘mimic’ the types of accounts and volumes they will have to deal with in the future.

Singapore

Singapore, the location of this year’s Sibos event

While Preston J. Byrne, co-founder and COO of Eris Industries, warned that banks are losing the monopoly on transaction verifications. Throughout all the discussions, Byrne (a former lawyer) acted as a devil’s advocate – often providing the contrarian view, and often sceptical about blockchain. At one point he says it ‘eliminates people, not machines’. Companies can compete against banks at no cost, but it also means fewer staff numbers are required.

The rest of the panel didn’t boo or hiss, but they did disagree.

Ludwin joked that in a ‘room of potential clients’ it was unusual to talk about barriers or negatives – but he says the industry must take something ‘abstract’ and ‘make it real’ for it to progress.

Dan O’Prey, CMO at Digital Asset Holdings, says there is also a ‘lack of talent’ as some companies struggle to find the right people to implement the platforms or simply join their firm.

Leda Glyptis, head of EMEA innovation centre, Bank of New York Mellon, agrees – and says the ‘talent is outside our organisations’.

She also says: ‘We have new capabilities to ignite the imagination, but we may have to redesign what we built’. In her view, the ‘old world stuff’ will have to interface with the new. There will be a lot of ‘philosophical questions and a creative struggle’ as blockchain enters the mainstream.

In terms of how it progresses and how banks can test or experiment with it, Buitenhek jokes that the ‘credo is to fail cheap’. Banks should try small things, so if they don’t work it’s not catastrophic.

Brave new world

Taylor is keen to bring out the advantages and says blockchain is good at data verification and removing the ‘towers of Babel’ that currently exist. But to implement such a standardising solution means the backing of a ‘heavyweight’ company.

He thinks firms need to keep their ‘eye on the ball’ when it comes to developments so as to not get left behind.

In something evoking the spirit of John Milton’s ‘Paradise Lost’, Taylor calls the next 18 months a ‘battle for souls’ as blockchain firms need to persuade the big players to join their party.

He may not have to wait that long.

At the beginning of the hour-long session, the audience were asked the question: ‘How seriously is your organisation looking at blockchain technology?’

Initially 20% were ‘seriously interested’, but at the end of the talks the same question was asked again to engage impact.

The figure had risen to 34.3%. It seems the love for blockchain keeps on growing.

By Antony Peyton

by IBS Intelligence
imp-loader
preloader