A blockchain-focused panel at Finnovasia yesterday drew so many interested FinTech professionals extra chairs needed to be brought into the auditorium.
The panel session at the Hong Kong conference centered on how blockchain is changing banking in Asia, with the audience there to hear insights from UBS Asia-Pacific CTO Peter Stephens; BitSpark CEO George Harrap; and ANX CTO Hugh Madden, among other industry participants.
Amongst the assembled panelists it was perhaps Stephens that drew the most attention from Finnovasia’s attendees for his insights into how the financial services firm is experimenting with how blockchain tech could evolve its business model
Stephens told the audience:
“Banks are engaging. They’re trying to understand where this future lies. This isn’t just a new customer experience, this is real disruption from the business models. It will take business models out completely, it will create new business models. Disruption from blockchain isn’t just going to be in financial services.”
In response to a question by moderator Pindar Wong, Stephens further noted that UBS is investigating a variety of blockchain technologies, including open-source options from bitcoin and Ethereum, as well as permissioned networks.
Stephens also spoke about UBS’ interest in blockchain technology as a way to replace its “several hundred” internal ledgers, an issue he suggested was by no means unique to UBS. He added that he believes the blockchain could impact any company processes that either “lock up capital” or are “manually intensive”.
Elsewhere a diverse set of industry stakeholders including Gatecoin CEO Aurelien Menant; Bitquant’s chief science officer Joseph Wang; and WIP Solutions CEO Alex Edana presented views on various issues facing the technology.
Bitcoin or blockchain
In what has become a widely asked question at recent conferences, panelists were encouraged to share their thoughts on which blockchain technologies were likely to “win out” or otherwise be widely used by traditional finance.
As expected, answers varied depending on the business model of the panelist.
Madden, whose firm ANX has been pivoting toward working with enterprise clients, for instance, said he believed in offering clients “mature products”, and that bitcoin is the only such offering in the blockchain market today.
“We use bitcoin when we need to put something in the market that doesn’t break,” he said. “If your time to market is two years, Ethereum is much more sophisticated technology.”
WIP Solutions CEO Alex Edana, whose company is building a blockchain that does not use proof of work mining, unsurprisingly spoke out against bitcoin’s reliance on a distributed network of computers outside the control of any one individual or entity.
“If you try to sell me on proof of work or 10-minute throughput, I would say ‘Why should I trust a third-party?’ Miners, if you don’t know them, there’s a problem with know your customer (KYC), there’s a problem with control,” he said.
However, Edana was quick to stem his criticism, adding:
“As an asset fine, fantastic. I think it’s exciting.”
One of the more interesting audience questions asked the panel to address how the panelists believed financial incumbents should engage with the technology, and whether they will need partners to help them explore the technology.
Here, Stephens spoke about UBS and its partnership with blockchain consortium startup R3, stating that he doesn’t believe banks can learn the technology on their own.
“This technology is all about sharing,” he said. “You can’t share on your own. This is why we’re engaging. We’re not exclusively doing R3. We’ll have other experiments with industry startups, telcos and banks.”
On the subject of the many projects ongoing in the blockchain space, another audience question sought to assess how financial incumbents could avoid creating a situation where there are as many blockchains as private ledgers.
To this, Stephens voiced his belief that the industry needs to embrace “open standards”, which he suggested would need to be a feature even of permissioned blockchains.
Edana was confident that collaboration would likely be easiest and most swift in smaller markets where industry collaboration would be easier.
“Australia will be the first market on the blockchain in three to five years,” he said. “There, you only have [a small number of] banks and a couple exchanges.”
While panelists may have been conscious of a market with too many blockchains, audience members did not suffer a fatigue from the subject matter.
In a later panel, Ernst & Young’s Ira Dhalawong summed up the enthusiasm for the technology at the event, noting:
“The room has thinned out since blockchain.”
Image via Pete Rizzo for CoinDesk