The prominent Union Bank of Switzerland plans to set up at least a dozen desks located at a London-based innovation lab and accelerator, Level39, more specifically in its high growth division, HighGrowth:42 by the end of April to conduct research on the Blockchain technology.
When questioned about the move, UBS’ Chief Information Officer Oliver Bussmann spoke about UBS’ intentions to foster an open and collaborative environment between banks, start-ups and investors to accelerate innovation opportunities and help the industry move forward.
His hope is that their innovation focused lab at Level 39 will provide a platform to explore critical emerging technologies such as the Blockchain and crypto currencies in general and to better gauge their potential impact on the banking industry.
ON THE POTENTIAL OF THE BLOCKCHAIN
Referring specifically to the Blockchain’s potential, Bussmann said hopes it will not only change the way that banks traditionally handle payments, but the whole trading and settlement topics.
Considering his words, it might not be accurate to say that UBS is ready to dive head-in into the crypto market, but they surely understand the importance of its underlying technologies for the future of money management. This move marks one of the first actual forays by a major international bank into the Blockchain ecosystem: many other have expressed their interest, but few have taken tangible public action.
Level39’s website boasts about it being the largest technology accelerator hub. Located on floor 39 of the iconic One Canada Square building, it’s involved in the growth of companies ranging from finance to cyber-securities. CEO Eric Van der Kleij had this to say about the company:
“The idea behind Level39 was to create a place that was somewhere between a bank and Facebook and Google, because it’d have to be a place that was comfortable for the bank, the senior executives to be, not to be frightened away because it was too funky for them – and it also all had to be really comfortable for innovators, the geeks, to come and want to hang out and bump into the innovators and investors- as well as the banks that they want to talk to.”
The division where the UBS’ lab will be located, HighGrowth:42, is a subspace reserved for the Level39 affiliated companies and startups that are serious about aggressive growth and whose work team ranges from 8 to 30 participants.
ABOUT THE UNION BANK OF SWITZERLAND
UBS not only provides investment banking services but also asset and wealth management for clients all around the globe. It operates in over 50 countries and counts with a workforce that numbers around 60,000 employees. It’s combined invested assets are valued at over 2 trillion USD, which earns it the #1 spot on the list of the world’s largest private wealth asset management companies.
Key members of the UBS team are already familiar with the Level39 team, having worked alongside them in mentoring opportunities at different accelerator programs.
The UBS’ had already released a detailed 31-page report on March 28th 2014 discussing Bitcoin’s potential to disrupt the current financial system, entitled “Bitcoins and Banks: Problematic currency, interesting payment system”. Here are some of the reports’ best excerpts:
“Bitcoin’s speculation-drive volatility prevents it from being a stable store of value or unit of account, …”
“The two main threats Bitcoins poses to banks are dis-intermediation and competition over transaction fees.”
“… a bitcoin-like technology could provide a basis for a new shared payments and transfer system using existing currencies and securities … given the status quo and the lack of any clear incentive for developing such a network, we do not see banks developing this any time soon.”
Apparently, at some point during the past year UBS found the incentive they were looking for.