Blockchain Will Increase Efficiency of Businesses says UBS CEO

“Our industry will continue to be under pressure, in terms of gross margins. 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.”

This was the statement made by the Swiss financial services giant UBS Group AG, Sergio Ermotti who endorsed the blockchain technology. He made this statement yesterday June 18, during an interview with CNBC where he argued that the technology is “almost a must” for business.

According to Ermotti, using the blockchain technology would aid businesses to become more efficient and in the process, reduce the cost of running some operations. He added that blockchain technology would help firms free up resources, even though he focused more on the increase in efficiency.

The bank entered a partnership with IBM and some major banks like Bank of Montreal (BMO), CaixaBank, Commerzbank, and Erste Group two months ago, as they look to develop a Blockchain trade finance platform called Batavia. The platform developed works by tracking events in a product’s supply chain, with some key events set that could lead to the executions of smart contracts that close trade agreements. Batavia performed its first pilot transactions in April, which saw cars sent from Germany to Spain and furniture production textiles from Austria to Spain.

Ermotti commented that blockchain technology “will be as crucial and disruptive, and changing as regulation was in the last ten years,” during the interview. His view was echoed by almost all top bank executives who remain bullish on the blockchain. The CEO of JPMorgan Chase, Jamie Dimon earlier this year told Fox Business that “The blockchain is real. You can have crypto yen and dollars and stuff like that. ICO’s [sic] you have to look at individually,” even though he is regarded as one of the most prominent critics of Bitcoin and cryptocurrencies.

Ermotti had previously praised the blockchain technology while desisting from talking about cryptocurrencies. During an interview with CNBC in October last year, Ermotti commented that he prefers to speak about blockchain since he is more bullish about it than he was about cryptocurrencies.

The chief investment officer of UBS, Mark Haefele has never been a fan of Bitcoin and he called is a very risky investment last year, in a report by Coindesk. UBS chairman Axel Weber earlier this month revealed that the bank has no intention of offering its customers cryptocurrency trading services, stating that they are “highly speculative investment vehicles,” and at that they “facilitate the financing of terror, money laundering, and other criminal activities.”

Weber, however, admitted that there is a massive potential in blockchain technology, stating that “everything that makes processes simpler, faster and more secure is beneficial to all of us: client, shareholder or bank.”