"The ability to do those changes within minutes or seconds instead of waiting two days for an execution… is a big change,” he says. “If you can’t trade an asset for two days, and now you can do that, that minimizes your exposure in the marketplace. I would not underestimate that.”
Despite Bussmann’s bullishness on blockchain, the technology remains in its infancy, as the financial services industry is just beginning to explore the blockchain's potential. BNY Mellon, for example, says it is testing blockchain internally to see whether it can be used to motivate workers to complete tasks. To cultivate the industry's interest in the technology, Bussmann says UBS has launched innovation labs in London, Zurich and Singapore, where startups are attempting to build a blockchain solution that is secure, scalable, efficient and trustworthy. The company last week also announced "Future of Finance Competition," which includes a series of “immersion workshops” designed to encourage startups to develop their ideas for blockchain or other technologies that can advance global banking.
His efforts to develop the mass-market blockchain have received the support of CEO Sergio Ermotti and the company’s board of directors. “Sponsorship from the CEO is very important because it opens a lot of doors,” he says. “We spent a long time with the executive board talking about the blockchain last year.”
Blockchain needs industry collaboration to drive transactions
Sponsorship by the CEO and board are all well in good, but the bank will have work with other banks and financial services entities to settle on a proper solution. "The banking industry, together with entrepreneurs and other institutions like stock exchanges and clearing houses will have to find a way to identify a good solution," he says. "You need counterparties to see if it's working." If someone establishes that, financial transaction volume swill shift toward the blockchain, he says.
While Bussmann's enthusiasm for the blockchain is clear, the work was possible only after he showed progress in two other key areas since he joined UBS in 2013 from German software giant SAP, which under his tech leadership was among the first high-tech companies to roll out iPads for corporate use. He had to improve operational excellence by simplifying the bank's infrastructure, reducing reliance on servers and some applications. He also invested in transforming the business, including building mobile applications and improving online business processes for bank employees and customers. He says he’s had to "earn the right to spend time on innovation."
"As an IT leader you have to prove that you have your house in order and that you have the foundation in place and that track record of delivery," he says.
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