Business Strategy, Blockchain Regulation, Financial Services, CIO, Digital assets

Bliver Bussmann Blokchain Live 2017 Speaker
Global Though-Leader, Oliver Bussmann

With a highly distinguished background straddling both technology and finance, Bussmann has spearheaded real innovation within some of the world’s most successful institutions including UBS, SAP, IBM, Deutsche Bank and Allianz. The OnTheBlock team were excited to gain a better understanding of Bussmann’s take on the business benefits of blockchain, if anyone truly knew how to read the signals of technological innovation, it was Oliver Bussmann.

Bussmann told us that he first came across blockchain in 2014, instantly recognising the technology’s potential for creating real-time trading and settlement. If it could be so transformative to such a complex eco-system, what did blockchain mean for the way businesses would operate in the future? Conducting visibility studies with Richard Olsen, founder and CEO of Lykke, Bussmann explored the potential for new business models as well as products. This activity ultimately culminated in the establishment of a pioneering team in L39, Canary Wharf’s renowned centre for innovation in fintech, cybersecurity, retail and smart city technology.

We discussed some of the glaring advantages which Bussmann and this team of innovators unlocked from bitcoin’s foundational technology. It was clear that blockchain’s capability of cutting through the long laboured inefficiencies of legacy systems and practices was significant. Bussmann told us that as we see the first movers going to the granular level with selective use cases making waves within the payments industry, for example, it was likely that breakthroughs in the adoption and application of blockchain was imminent. From his experience of working with over 50 of the world’s most prestigious banks on payments innovation via blockchain, Bussmann had witnessed ‘users taking it further and doing payments between and within their global branches’. And the savings benefits are no mere pocket change, with global payments set to realise between $50-$60 billion in efficiency gains and $15 billion to be saved within trade finance.

“we will see more new business models coming up, totally decentralised business models with companies operating on a token based approach.”

The growth of consortia has been key to this success. Moreover, consortia stimulate another necessary step towards realising of blockchain’s potential. Bussmann explained how more cross-industry activity, referencing, insurance, supply chain, trade and finance, was on the one hand being driven by blockchain and on the other driving blockchain’s development. He was quick to note also that convergence of industries is mirroring a convergence of technologies such as IoT, further adding to the blurring of lines between long established sectors. Blockchain is helping to enable this new tapestry of technology and services.

Bussmann predicted that ‘we will see more new business models coming up, totally decentralised business models with companies operating on a token based approach.’ This model will radically change not only how services are funded but the motivations and incentives for engaging with services, and Bussmann believes that like the internet, this model will endure. That being said, a lot of the innovation that can expected in the coming years is not wholly novel. In discussing how blockchain removed many barriers affecting certain industries as well as inter-industry relations, Bussmann prompted us to see blockchain as both the result of and a driving force towards what he called the next phase of computing. For instance, we were told that in order to truly support smart contracts, distributed computing models and edge computing had to be a reality, a reality which blockchain is helping to achieve.

Tech disruption can sometimes be a daunting prospect to organisations who are unsure about what innovation can mean for them. It’s important that they engage, we are told, that they visualise the business benefits and engage with the ecosystem and establish partnerships. Despite much of the activity surrounding partnerships and consortia, being open to engagement with competitors is not an instinctive first step for most organisations. According to Bussmann this mind-shift is one of the largest barriers to wider adoption. Another challenge is jurisdiction and governance, disaccord between various national regulators is, for Bussmann, a measurable contributing factor to rates of innovation.

Another consideration organisations will have to take when faced with blockchain in particular, but also innovation in general, is knowing when to invest. Investing in disruptive technology too early, and here Bussmann cites the experiences of the banking sector, will incur unnecessary costs to established revenue streams. Invest too late however, and you miss the competitive advantage. The speed of blockchain has taken many by surprise, and the market appetite is only highlighted by the staggering levels of investment in Initial Coin Offerings (ICO) which the VC industry has witnessed over the past 6 months. The difficulty as Bussmann sees it is being prepared for such changes, stating that the tipping point is often followed by a rapid acceleration of changes in line with which it is difficult to reactively shift your business. It’s not a simple case of first mover advantage we are told, but also ‘what kind of role you want to play in the future’. The key take-away is doing your homework.

As our chat came to a close, we asked Bussmann where businesses should best direct their attention. In addition to the big players, the top 10, as Bussmann calls them, he also advises us to ‘watch the start-up ecosystem around Ethereum because the combination of the private and public ledger, this integration is the future’.

See Oliver Bussmann’s Opening Keynote on our Centre Stage at Blockchain Live. If you want to find out more about how his Bussmann Advisory organisation is helping organisations reap the benefits of tech innovation, check out his website.

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