Helen Disney, Founder, Unblocked
Please give us a bit of background on yourself, and how your organisation plays a leadership role in the financial technology space.
I became interested in Bitcoin and blockchain technology around three years ago when I began working on a major European conference project for the Bitcoin Foundation. At that time, very few people outside the tech world knew much about this topic, including myself. As I started reading and learning I rapidly became interested not just in the potential of Bitcoin to transform how we use money but also in the transformative and innovation application of blockchain to other sectors like healthcare, energy, music and government services, to name just a few. I have now founded a company called Unblocked, which runs events to inform, train and educate executives on how these technologies can be harnessed to transform their businesses and their lives.
How well are financial companies adapting to the rapid pace of fintech development? What fields are furthest ahead of the game, and what sectors are being left behind?
Fintech is challenging many areas of traditional finance – from investment banking and hedge funds to the insurance market and trade finance. Most companies are certainly aware that fintech poses both opportunities and threats to their existing business models and management practices but in many cases they still see this as a curious new phenomenon to study rather than a rapidly-changing field that is already overtaking many aspects of what they do. The City has embraced this trend to some extent, at least as far as blockchain goes, by forming strategic partnerships and also by joining consortia like R3 and Hyperledger projects to explore what can be done with the technology, although a number of big banks such as Morgan Stanley, Goldman Sachs and Santander have also recently dropped out of the R3 project. The slowest companies to change tend to be the most risk-averse such as insurance companies or those organisations where technological change is generally more complex to implement and it seems cheaper safer to stick with the status quo.
What challenges do you see for fintech development and disruption, both from a user's perspective and from a regulatory standpoint?
As far as blockchain goes, from an average user’s perspective there is a barrier in both general understanding and technological knowledge. The man on the street may have heard of Bitcoin but very few have heard of blockchain or realise what blockchains can do. However, I see this as more of a challenge for companies in the space: it is really up to them to produce user-friendly products and services that add value for customers. Just as most users of webpages don’t know how the Hypertext Transfer Protocol or http works, no customer really wants to understand the ins and outs of the Bitcoin core protocol or what a blockchain is – they just want a service that gives them something faster, more secure and more useful than what went before. The same argument could be applied to regulators – they often fail to understand the nuances of these new technologies so the fintech world needs to find simpler ways of showing them the societal and economic benefits of what they do and be less focused on the minutiae of technical disputes within the sector. In the blockchain world, for example, we could think of ongoing disputes over block size or the DAO hack which generate a host of coverage on blockchain related news sites and blogs. But out in the ‘real world’ nobody cares or only in so far as it puts them off wanting to solve other more practical issues which may be more significant like making it easier for bitcoin companies to get access to a UK bank account.
What impact do you think Brexit will have on the broader financial technology industry in the UK?
It is very difficult to accurately predict the impact of Brexit on the UK economy in general since the entire discussion is really yet to get started and everything will depend on the precise terms Theresa May is able to negotiate and how long that process takes. It is clear, however, that this climate of uncertainty is bad for business. Many start-ups in the fintech world are on a very tight budget and timescale – they don’t have the luxury of waiting two years for the UK to get its ducks in a row. I believe the UK will start to lose some of its business to other fintech centres like Berlin if the opportunities for attracting venture capital or angel investment and recruiting the best employees end up becoming more attractive there.
What will you be discussing at The Economist's Finance Disrupted Conference on January 25th 2017 in London?
My panel at Finance Disrupted will discuss blockchain vs blockchain – in other words it will tackle the issue of whether there will be ‘one blockchain to rule them all’ or whether in future different types of blockchains will be used for different purposes. This argument tends to divide into those who believe the Bitcoin blockchain is superior due to its size and associated security benefits (it has never been hacked) and those who think this idea of a blockchain can be also taken and harnessed in other ways to create different types of distributed ledgers which can add value in other ways, for example, by speeding up processes within banking and financial institutions.
Who has most to gain (and who has most to lose?) from blockchain technology?
As consumers and as businesses, we all have an enormous amount to gain from the wider adoption of blockchains. We will be able to transact directly with our peers more securely and participate in the exchange of value online in ways that were previously impossible – be it trading excess energy units from our solar panels, checking the provenance of our goods or gaining access to our Airbnb apartment via a smart key. Yet there will be losers too. Old ways of doing things will die out; legacy systems in banks and insurance companies will be swept away, we may no longer have use for clearing houses and departments of banks which previously employed large numbers of people will be disintermediated. Customers may even choose not to have a bank account at all anymore and ‘be their own bank’, in the same way that many people now no longer have a landline telephone.
The positive response to this is that the advent of blockchain may destroy some old jobs but it will also create a whole swath of new innovations and businesses we have not even thought of yet – and that will lead to a wave of job creation in the industries of the future
To learn more about the Finance Disrupted event, please click here.