UBS Group CEO Sees Blockchain as 'Almost a Must' for Businesses

The popularity of blockchain technology among businesses is still gaining momentum. And among the endorsers of the innovation is Sergio Ermotti, CEO of UBS Group AG, a Swiss multinational investment bank, Coindesk reported.

In a recent interview with CNBC, the CEO said that companies can reduce their operational costs by integrating blockchain into their systems as the technology is capable of streamlining their services. These capabilities are what make blockchain “almost a must” for businesses, according to Ermotti.

"Our industry will continue to be under pressure, in terms of gross margins. It's no doubt,” Ermotti admitted. “The only way you can stay relevant is not only by being strong in terms of capital, in terms of products, the quality of the people you have, advice you give to clients. You need also to be able to price it correctly."

Although Ermotti sees a lot of potential for the technology’s application across different markets, he said that adoption of it will not happen overnight but will occur in the next decade or so. And UBS is already building this foundation, partnering with the Bank of Montreal, IBM, CaixaBank, Commerzbank, and Erste Group to create a consortium called Batavia. The enterprise has already seen its initial transaction, in April, when it sent cars from Germany to Spain and furniture textiles from Austria to Spain.

Despite Ermotti's praise for blockchain, he isn’t particularly a supporter of Bitcoin and other cryptocurrencies. This aversion isn’t unfounded as virtual currencies are wanting in some areas and have issues of their own like volatility and scalability.

Other prominent figures, like Warren Buffet, have also scathingly criticized cryptocurrency, going as far as calling it “rat poison squared.” Of course, even with Buffet’s glowing resume, the man isn’t infallible and has made false predictions in the past, particularly the one with regards to the extent of success Amazon owner John Bezos would reach. Even Bill Gates was guilty of this when he branded the then-budding internet as nothing more than a hype.