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NEWS R3 boss talks go-lives, losses and funding
It was perhaps inevitable that a topic like blockchain would appear at an industry event all about disruption. David Rutter, CEO of the R3 consortium, spoke at TechCrunch Disrupt in London during December about what the technology has in store
Senior Reporter Alex Hamilton
companies in the world,” said Rutter. “We trust them, even though we say we don’t.” Blockchain is a technology that can change the way banks operate. Their own technologies are part of the problem no matter how fast they are, stated Rutter, calling the array of solutions “spaghetti string”. “We have an opportunity to create a secure financial infrastructure in the cloud, allowing banks to move all of this data safely.”
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On open sourcing the Corda system, Rutter noted that the firm felt strongly about getting “more eyeballs” on an infrastructure and that Corda is something that can be used for 20 to 30 years. It is also applicable to other fields like insurance, medicine and retail. “The world is changing and the banks are worried about vendor lock-in,” said the R3 CEO. “Once a vendor is integrated into your workflow you’re stuck with them.” This is why there are advantages to open source and why, in his opinion, it will see more adoption in the future.
On the amount of member banks onboard, Rutter stated there are times when he thinks there might be “too many”. In order to reach out to global markets, though, you need a consensus from a wide variety of participants and for that a new network is required. On how consensus is reached in the group, R3 drives the conversation, despite the increased membership. Looking at the future, it will “always be built” and the system will be adopted within three years but we will see the first implementation by the end of 2017. Easy wins are being made in trade finance, claimed Rutter, as well as five different payments projects underway, including work with the Canadian government.
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anks are the most highly-regulated
R3 has taken a “harder route” than firms like Chain, thinking more broadly about problems with financial infrastructure, rather than looking to solve a singular problem. “We have a number of horses in the race at the moment and we don’t know which one is going to win,” said Rutter on which of its projects will go live first. The government schemes are likely to be at the head of the pack, in either Canada or Singapore. R3 is also working with the Monetary Authority of Singapore to improve payments infrastructure.
On the subject of R3 losing participant banks, like Goldman Sachs and Santander, Rutter found it amazing that so many have joined and worked on the system and that a major funding round may have had some effect on the attitudes of some members. This itself hasn’t closed but is making “very good progress” with “a lot of lawyers” involved in the process. “This is first time I’ve ever tried to raise money,” joked Rutter. “Hopefully it will be the last. I’ve never met a man who enjoys his funding round.”
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