Last week Cygnetise presented at “The Future of Wealth” conference organised by the International Banking Forum and PwC in Jersey. The event focused on the seismic changes caused by structural reform, the fintech revolution and what this means for businesses charged with growing international wealth.
Damian Bell, Business Development Director at Cygnetise, spoke about blockchain on the "Innovation and the adoption of FinTech solutions" interactive panel, alongside with Kirsty Rutter, Chief Innovation Officer at Barclays, Dr. Louise Beaumont, Co-Chair of techUK’s Open Banking & Payments Working Group, and Nick Vermeulen, Partner at PwC Channel Islands.
We sat down with him and asked a few questions on innovation in financial services and in particular, in the Channel Islands.
The theme of the panel discussion you participated in was around innovation and the adoption of technology solutions in Financial Services. How are banks innovating today?
In as many ways as possible is the short answer! However, as Dr Louise Beaumont (TechUK) observed, whilst other large sectors such as Defence and Pharmaceuticals have R&D teams and budgets, these have for a long time been neglected within Financial Services. So this is where innovation labs have appeared within banks, as a way to kickstart the reinvestment into R&D.
But there’s a right and a wrong way to create and manage innovation – within a ‘lab’ and in general – and creating the right internal behaviours is as important as finding the right technology businesses a bank wants to work with. For instance, Kirsty Rutter (Barclays) has set up a rigorous methodology to screen companies looking to partner with Barclays, whilst internally the bank actively identifies ‘blockers’ (i.e. individuals in management) to new products and procedures and tackles them head on.
Cygnetise is one application of blockchain in financial services but there’s a myriad of them. What’s the potential for it?
Massive. Nick Vermeulen (PwC) summed it up well when he said “blockchain as an idea – that of a distributed database – has been around for many years. However it is now only the reduced cost of computing that has made it feasible to build and deploy at scale”. “What used to cost upwards of £1mn to create in 1994 (just the hardware) can now be done for £4.60 per month (including all the code base, software, electricity consumption etc) – and that’s having a huge effect on innovation”.
In May 2018 PwC and Northern Trust successfully launched their private equity focused audit product, which is a perfect example of how blockchain can make a business process more accurate and efficient.
“Guernsey and Jersey” you said, “have a distinct advantage in terms of innovation and the clients who trust their financial services sector”. Can you please expand?
For the Channel Islands in particular, collaboration is key. They have an incredible opportunity to trial, hone and deploy new technologies, across all sectors – not just financial services – because of the trusted legal framework, global corporate relationships and client service provide. If a new product or methodology works in the Channel Islands, then others will follow their best practice.
What’s your main takeaway from the event?
By collaborating and embracing innovation, then the future of Jersey and Guernsey will be easily ensured. And many other locations will follow their lead.