The lab is scheduled to open as early as this month and it will occupy a dozen desks at Canary Wharf-based fintech accelerator space Level39 – a hub in London set for financial technology startups. It will bring together technology experts from the bank and the wider fintech community, UBS explained.
Lab members will try to figure out how blockchain — the underlying technology behind digital currency — can be adapted to process a wide range of financial transactions in a more efficient and cost-effective way, the bank said.
“While many in financial services have expressed an interest in the underlying technology behind bitcoin, UBS’s is one of the first banks to go public with their plans. The idea is to get UBS more involved with the fintech crowd in London and open up to external innovation,” The Wall Street Journal writes.
“The blockchain is the public and decentralized online ledger which verifies transactions in digital currencies such as bitcoin. It is an indelible record, whose authenticity is verified by a network of computer users rather than a centralized authority.”
Oliver Bussmann, Group CIO, UBS, says: “By establishing a dedicated innovation lab at Level 39 we are moving away from a purely in-house innovation strategy, optimising collaboration opportunities with the growing FinTech business, start-up and investor community in an open and transparent way.”
“Our innovation lab at Level39 will provide a unique platform to explore emerging technologies such as Blockchain and crypto-currencies, and to understand the potential impact for the industry”
Speaking to the Wall Street Journal in October, Bussmann voiced his approval for the blockchain by stating: “Blockchain technology will not only change the way we do payments but it will change the whole trading and settlement topic.”
“Fostering an open and collaborative environment between banks, start-ups and the investor community is essential to ensure we focus on promoting synergies between us, accelerate innovation opportunities and create real value for the industry,” he adds.
In fact, London can be named a leader in Bitcoin and blockchain-based technologies, as it’s adopting a friendlier regulatory stance than its counterpart in New York.
The UK government has provided about £10 million to support research in this area. There are several Bitcoin and cryptocurrency related startups growing in the capital only. Being a financial and technology hub in Europe, the startups have access to both financial and technology capital from not just the UK but the whole of Europe.
A recent report by Accenture on the FinTech industry found that the total amount invested in this sector rose from just over $4bn in 2013 to more than $12bn last year, Europe being the fastest growing region in the world.
“Investment in financial-technology (fintech) companies grew by 201% globally in 2014, compared to 63% growth in overall venture-capital investments, confirming this sector as a hot ticket,” the report claims.