BBVA sent a contingent to the heart of New York City’s Financial District earlier this month for the invitation-only Blockchain Opportunity Summit, where executives from various industries explored how distributed ledgers, smart contracts and blockchain can drive the next generation of commerce.
Scarlett Sieber, who oversees business development for BBVA’s global New Digital Business unit, was on a panel at the summit moderated by Reuters fintech correspondent Anna Irrera on how the financial industry is unpacking the possibilities of the nascent technology. Sieber was joined by Chris Ballinger, the chief financial officer at Toyota Financial Services, and Alex Batlin, the global head of blockchain for BNY Mellon.
Sieber, who was recently one of four BBVA executives named to Innovate Finance’s Women in FinTech Powerlist, discussed the summit in an email interview with BBVA Compass External Communications.
What's BBVA's attitude toward blockchain?
BBVA is interested in the potential for blockchain. We were one of the founding members of R3 (a blockchain consortium) and have a team of cryptographers and engineers who actively test the space. We have done proof-of-concepts with just about every distributed ledger platform out there. Before BBVA Ventures spun out into Propel, it also invested in a bitcoin company, Coinbase.
The two groups within BBVA that are most interested in blockchain are the New Digital Business group and the Corporate and Investment Banking group. For CIB, the interest also come for the opportunities that blockchain creates for our clients around identity, cross-border payments, trade finance, etc.
Participants at Blockchain Opportunity Summit event. - Richard Gordon
Banks aren't necessarily known for being technology early-adopters, but you were on a panel to discuss how the financial industry is leading the way on blockchain. Do you agree with that idea? What is different about blockchain that allows us to lead the way vs. lag?
Some of the first and largest use cases for blockchain are in the financial services industry. Financial institutions are leading the way on blockchain from the incumbent perspective, but there are other large players who are getting heavily involved as well, like Microsoft and IBM, which have created entire business lines around blockchain. More than 90 central banks in the world have expressed interest in blockchain and over 80% of banks are expected to initiate a distributed ledger technology project by 2017.
Not only are you seeing FIs be the early adopters in the space but you are seeing the emergence of many consortiums. Collaborations help define a cohesive strategy, and for certain use cases of distributed ledger technology (i.e., the capital market space and a central bank digital currency), universal adoption is required to succeed. Some banks are taking larger stakes and putting more resources behind the technology than others because in many cases, the first-mover advantage is unclear.
Was there consensus on the panel about the biggest opportunity for blockchain?
The consensus on the panel was the same as in the larger space, which is the opportunity for cost savings. Depending on what source you refer to, you are seeing anywhere from $15 billion to $20 billion in cost savings for FIs. While this is believed to be the case, between now and then, there are a lot of roadblocks, particularly around scalability and cost to implement.