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IBM’s Lund: "Focusing on blockchain technology is a big statement by itself"

By The Asian Banker Live

Jesse Lund, head of blockchain market development, global financial services, IBM, discusses the company’s new universal payments solution and how IBM implements blockchain-related projects through a more collaborative client-engagement approach.

Here is the transcript:

Jesse Lund: Well, thank you for being here. And we're announcing today a universal payments solution that will really fundamentally transform the cross-border payments and correspondent banking space. You know there's been little investment in the core infrastructure of cross-border payments in the past three or four decades. And so really what this marks is IBM's investment in the cross-border payment infrastructures in the sake of helping its best clients: banks, financial institutions around the world, really optimise their operational efficiency as it relates to payments processing.

Well, blockchain in general is the new and emergent space. And for IBM, a big company like IBM, with a 107-year legacy to be focused on the space as concentrated as it is, is a big statement by itself. But the blockchain group within IBM is like a start-up. It's a start-up within a giant company and it marks a fundamental change I think on how we're interacting with our clients is, the same set of clients that we have, you know, the large banks and financial institutions, and central banks all over the world. But, rather than approaching them as just as a technology provider, IBM is really engaging as a collaborative partner and a co-investor in some very important areas where there is a lot of opportunity. It has a lot of opportunity for the banks, as they try to stem off the threat of fintechs that have emerged within the billion-dollar industry. But it's also an opportunity for IBM to change the composition of how it drives revenue as well.

Well, in some ways we might need a new language to describe what we are talking about because when say cryptocurrency, it automatically gives people a thought of something. But, really, cryptocurrencies are just a digital asset, a means of exchange for brokering a foreign exchange, for example. And so, the novelty of this solution that we are announcing today is indeed based on the use of digital asset. And in today's market, the only viable digital assets that are available are of course, cryptocurrencies. But what we are really seeing, what IBM is sort of vetting with this solution, is the ultimate advent of central bank issued digital currencies, digital assets. And what that means is that there will be more monetary policies, more controlled that goes into regulating of use of this without restricting the capabilities that it offers. So, in many ways, it's a convergence of concepts of what cryptocurrencies or bitcoin kind of promise with this accelerated global real-time gross settlement network but it doesn't sacrifice the governance and the controls and the soundness of real monetary policy behind. And so, we're building in advance of that and anticipating that central bank issued digital assets are going to be a reality, probably a reality a lot sooner than most people think.

I would say that it's been IBM's objective to really make the market aware of the benefits of blockchain technology or distributed ledger technology. And to prove those benefits through accelerating the life cycle of what was piloted or the simulations to actually full production implementation because that's what we're really good at. We're good at building mission critical transactional systems and this announcement, this solution that we're launching this week, actually marks a milestone in that evolution of going from researching pilot to something that's real. Something that is moving real money and that I think is the most important for large institutions to take away and small alike. That this is becoming mainstream and we're one of the forces driving it.



Categories: Financial Institutions, Financial Technology, Innovation, Technology & Operations, Transaction Banking
Institution: IBM
Guest: Jesse Lund
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