The CEO of Swiss financial services provider UBS Group AG, Sergio Ermotti, has said that blockchain technology is “almost a must” for businesses to remain competitive within the coming decade.
Ermotti endorsed the technology in an interview with CNBC, calling it a “great way” for companies to become more efficient and reduce costs for certain operations, adding that for the financial services sector it will be “as crucial and disruptive, and changing as regulation was in the last 10 years”.
“Our industry will continue to be under pressure, in terms of gross margins,” said Ermotti.
“It’s no doubt. The only way you can stay relevant is not only by being strong in terms of capital, in terms of products, the quality of the people you have, advice you give to clients. You need also to be able to price it correctly.”
Ermotti added that blockchain will prove to be transformative to industries’ cost bases in five to ten years’ time, adding that UBS will itself be prioritising the technology’s application in order to remain competitive.
That can already be seen in its backing global trade finance platform Batavia, which built on IBM’s blockchain technology is geared at creating a multi-party, cross-border trading network, that’s already seen successful pilots in trades of textiles and automobiles in Europe.
However, UBS’ interests in blockchain use cases should not be confused with a belief in the longevity of cryptocurrencies.
The company’s chairman, Axel Weber, said earlier in the month that the bank will not offer trading services in any cryptocurrency, adding that they are not transparent and therefore “open to being abused”.
This latest comment from the Swiss financial giant is just the latest affirmation of the power of blockchain technology to upset the status quo in banking.
Last week, The Block reported that the financial services industry spent $1.7bn (£1.3bn) on blockchain technology last year, demonstrating how large banks and other financial institutions are now moving beyond the proof-of-concept stage to seriously advance on distributed ledger technologies (DLT).
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