The Blockchain Revolution

The Ultimate Financial Services Industry

Disrupter
James Cohen, Chief Architect - Blockchain, HPE Pointnext
James Cohen
Chief Architect - Blockchain, HPE Pointnext

– James has been working in the IT industry for more than 40 years
– Joined HPE in the UK in 1997 and moved to worldwide in 2011 to develop
infrastructure solutions, initially platform transformation, and then Software
Defined Infrastructure, before focusing on Blockchain since the end of 2016
– Degree in the Mathematics and Computer Science from Brunel University
– Served as a Warfare officer in the Royal Naval Reserve for 38 years, including a
9 month deployment in 2012 to the Arabian Gulf in command of UK Maritime
Trade Operations
 +44 3305 872 025
 james.cohen@hpe.com

2
Challenges and Opportunities
for Financial Services
“What if…every kind of asset from money to
music could be stored, moved, transacted,
exchanged, and managed, all without
powerful intermediaries?”
Don Tapscott
CEO, Tapscott Group Co-founder, Blockchain Research Institute

Blockchain Revolution and in a 2016

TED Talk
 Part 1 of 3: The Authorization Processes (4 steps)

Cardholder Merchant Acquirer Credit Card Network Issuing Bank

1 2 3 4
YOU ARE HERE

Source: Odysseas Papadimitriou, WalletHub CEO

 Part 2 of 3: The Authentication Processes (6 Steps)

4 3 2

Cardholder Merchant Acquirer Credit Card Network Issuing Bank

6 5 1
YOU ARE HERE

Source: Odysseas Papadimitriou, WalletHub CEO

 Part 3 of 3: Clearing and Settlement (7 Steps)
1

6 5 4
7

Cardholder Merchant Acquirer Credit Card Network Issuing Bank

1 1 2 3
YOU ARE HERE

Source: Odysseas Papadimitriou, WalletHub CEO

 17 Steps
6+ Parties
7 Days
Fees
 What do “powerful intermediaries” do?

Intermediaries

Establish trust Financial Services Industry

Verify identities Centralized,

Corporations
vulnerable to attack
Provide Security & or failure
Prevent Fraud
Reconciliation Higher-cost
Process Transactions Governments/Regulators Slow, incremental
Keep records change
How do you pay for a taxi?
Current Transaction Process Blockchain Transaction Process
17 Steps, 6+ Parties, 7 Days Single Step, 2 Parties, 1 Hour

Passenger Taxi Driver

The advantages of a Blockchain

–Speed and efficiency

–Significantly lower transaction costs
–Transparency and self-auditing
–Opportunities for automation (i.e. smart contracts)
–The democratization of the exchange of value
–The potential to create a trusted universal platform to connect companies,
people, nations, machines, and more
 Blockchain is immutable

Blockchain is a Distributed Ledger, but not all Distributed Ledgers

are Blockchain

Blockchain enables trust between parties who do not necessarily

have existing trust – trustless exchange

Blockchain is not just about cryptocurrency – it is about delivery of

transactions as code – Smart Contracts

Authentication using encryption using private/public keys

12
Speeding and Simplification
Cross Border Payments
– In 2015 cross-border payments amounted to more than $150 trillion and
generated fees in excess of $200 billion
– Current process is expensive and slow (typically about 10 days between the USA
and Europe)
– There are multiple banks involved, but the system is well established and reliable
(SWIFT is used by more than 10,000 institutes in 200 countries)
– The alternatives such as Western Union are very expense – at about 10%
– Typical costs of remittances are between 5% and 20%
– Blockchain will reduce this to between 2% and 3% and reduce the time to less than
one hour
– Will require the wide spread use of Digital Currencies, where 1 digital unit will be
worth 1 fiat unit
– Proper regulation will be needed between the regulators as to how Blockchain will
be deployed

13
Cutting out the middleman
The future of Share Trading
– Blockchain could replace a complete exchange, without the need
for a central system to bring supply and demand together
– The physical exchange has already been replaced by the data
center and servers
– Nasdaq has already started a Blockchain initiative to lower
transactions costs and speed settlement, replacing the share
registration companies
– Scalability remains an issue that needs resolution
– Dedicated Blockchain trading networks such as the one being built
by Nasdaq, are created from the ground up with high volume
trading in mind, but are still very much in the testing phase

14
 Questions and
Answers?

‫ﺷﻛرا‬
Thank You
James Cohen
james.cohen@hpe.com