SWIAT –Making Banks Connectable

[Music] hello and welcome to everyone happy to see you all very very active in the chat please continue i'm very happy to introduce you now to martin and jungner 10 from dekapang they'll talk about how to secure worldwide interbank asset transfers well actually about their new platforms wyatt also i just want to tell you a little story straight from here jonathan is going to the airport because he's flying to argentina so i think yeah quite amazing how he's going to manage everything so yeah now i'll give the word to martin martin the state is yours and enjoy the keynote everyone thank you very much victoria and also a very warm welcome from my side and on behalf of jonathan we are obviously very happy and honored to be the first keynote at the ebc and we are sure we will not disappoint you and we are looking forward to very interesting discussions throughout the convention well we'd like to introduce to you our swyat initiative and obviously when you hear the word swayed actually some of you might also be from poland it means the world well what does it mean for us for us deca bank that's why it means future it's the door to the world and whilst it's only five letters and a question mark for you the goal of our keynote today is to get you enticed into this topic and that you understand why it better and at the end of this presentation you will think that this is also part of the future the question of the future obviously for us as banks was and still is are we banks ready for the future and is our business model really set up in order to be ready and deemed for the future that's something we've always asked us and we've asked ourselves especially in the line of the two mega trends which we are currently seeing one of them is digitalization obviously it is into everyone's words mouth ideas and most people or a lot of people my age think if you send it to other pdf this is already digitalization and there's a whole crypto world out there the cryptocurrency world which for various reasons i'm not going to talk about here but obviously the other big trend is blockchain and for the time being blockchain is not really part of our regulated world it is still really very much being in there in sort of a development stage and the question for us was what should we do should we wait and see do we want to be sidelined what's our ambition towards the whole idea of blockchain maybe just two insights into this question if you look at the market capitalization of digital assets we started in 2015 with 5 billion well and look where where we are today unfortunately this part of the exponential curve we know all from corona but this is not cruel influence this is pure and literal demand and as such we are of the opinion that this digital assets will be the future and the same is actually true for blockchain technology if you look at the smartphone technology and how it has rapidly developed you can basically see well smartphones it took them 15 years to conquer the world with 100 of market cap a lot of people say this is probably true it may be even faster when you look at the blockchain technology and the question is where are we and you see that we are just at this very very rock bottom and we will definitely see this exponential growth we do believe that blockchain blockchain technology is a pure and mature technology it has come to stay and if it has come to stay it's only a question of how rapidly it will be deployed at the various branches whether it's the financial industry whether it's airline or whether it's other but in general we absolutely are certain that this technology is gonna reshape our future so the future is blockchain and the future belongs to obviously then digital assets on the blockchain this will make life totally different in the future and will change many make many many market participants business models like all of you probably here you've had this thing about let's do a pilot project we do parks we do proof of concepts and whatever and for us the deca bank we started out with the german part which was the german child shine and then we came to securities lending because actually the cross border securities lending and repo business is probably where from a pure capital market's perspective you really can reap the benefits of a seamless and a very easy settlement project so it would be also would be better for liquidity management other ideas we looked into it and we really developed a so-called digital collateral protocol which enables us to put traditional securities on the blockchain and trade them between different entities different partners and actually we brought this also live however when we looked into this whole issue we saw that we have a very fragmented hierarchical financial infrastructure which slows down the velocity of transaction and is extremely expensive and it is extremely ineffective this obviously anybody who is into the repo business knows that sometimes well you wait two days or three days for u.s treasuries to deliver and you wonder will they actually come so as we had developed and had put this to the market as we did transactions we really saw well actually there's another challenge which is far bigger the challenge is not to use and to utilize the technology the challenge is to rethink transactions entirely on the potential of the blockchain because blockchain in a regulated infrastructure is really what we need to deal with and what we need to deploy so we actually came up with our analysis saying only a network where data assets transactions are linked and managed in a blockchain of one network can be the answer but the key question is if digital assets are the future which are all traded and dealt with on the blockchain the key question for us for the financial industry is still are we connectable are we not only connectable with our products but we as a bank we as an asset manager we are the fourth largest asset manager in germany so what is the future in that respect and in that respect our answer is clearly only one platform makes us connectable to the network of the future and obviously if we ask our questions we have to say for the time being we haven't been connectable now we have to become to connect be connectable and we must not solely think in a simple plot product which we want to deploy we got to think much bigger which means we gotta think in a platform idea that's what we've done and that's why we come up with an answer which is so-called swyatt it's wired and a couple of people who come from purple markets know obviously swift swift is the old the stands for the analog world because swift stands for secure worldwide interbank financial telecommunication and this is how most of the correspondent banking transactions on the payment side are still done but in a blockchain world this is different so we need a platform where we can have a secure worldwide interbank asset transfer and uh this is exactly what we have done so far what we've suggested and put to life and that's where i would like to hand over to jonathan who's going to take you along our journey more into our value proposition and the various aspects which are extremely important of dealing with and on inspired thank you very much martin um yeah i will take you a little bit deeper into the value proposition of swine and what's why it actually is and how we have constructed it um the value proposition of swayed follows the overall goal of making banks connected what do banks needs and what do they demand from a network for financial institutions and we say that it has to comply with three things secure and trustworthiness and scalability and a typical issue for these kind of projects is that platforms and consortia is they try to solve too much at once with their platform without the required capacity and without the clear governance and this leads to the failure of scaling and therefore we at swyatt propose that we only focus ours on the basic infrastructure to enable decentralized applications and competition on the network so that this becomes a true scalable governance model where swyat is only the naked infrastructure the network itself while others invent others develop and others offer services and for this to take place obviously we have to share the technology from darshan foundation and that is something we will do um technology in this sense is not a differentiating factor in the regarding competitiveness technology as a shared foundation is a utility that fosters and enables innovation and this is up to you then to develop and to deploy your own services on a network which especially targets financial institutions as martin explained and why and furthermore we are keeping the network ethereum compatible because we see a lot of innovation happening on ethereum which is why we keep the network compatible um but in the same time we see that the platform must be competitive as well and we see for the time being some issues for example with your main net and i think everyone over here knows that the transaction the transaction costs are quite high and this is not feasible for a streamlined business solution from our perspective and this is exactly why we propose a secure network with trustworthy entities that are governed by financial regulation and known to regulators and thereby creating a safe environment in which financial institutions can interact freely and this is exactly the value proposition we have for you and hence swipe is a hybrid platform on one side swipe destroy is a transaction platform which enables faster asset movement and this cheaper more transparent and securely than ever before but you all have heard about that this is the traditional business we all do um we want to enable that's why it is capable of moving traditional securities and digital and crypto securities and this is something we have shown already and the ambition of swift is of course to provide as well crypto assets and currencies as well as tokenized assets once wyatt there will be all different kind of assets accessible tradable and manageable on one ecosystem and we want to foster this with our other side the innovation platform which allows you to integrate new assets and business models as well as to deploy your own services let's have a look how the app store of the financial industry on swyatt will look like and general the innovation platform has three layers first the core the technology layer adding meaning at the the the core layer the technology foundation and the network itself second the feature layer adding meaning and conditions to transactions and position keeping and last building up on that is the decentralized application layer for your use cases and service offerings and for every layer we have to find roles that platform participants can take over simultaneously and the platform participants and actors on swipe which we are searching for and which we are currently combining on this environment are banks custodians startups and fintechs focusing on the institutional market and the institution of financial market asset manager and many more and all they and all of you can expand the core of the network develop your own new features or reuse existing features for your own decentralized applications and your own services thereby making swyat a true innovation platform so obviously the question now is what if this vision and idea has already been achieved and we're happy to tell you some parts what we have gone and achieved so far swipe from zero to one to the first step so the transaction volume of our platforms why it has already surpassed the 500 euro we developed a new trade type for securities lending called delivery versus delivery which has not existed before we have proven that a green digital registered bond can be on the same platform like traditional securities which we can move on the platform without the classical tokenization referring to a change of rights and obligations we make the asset itself available on chain unswired as it is with the current rights and obligations furthermore the registry keeping has been developed it is a core feature and is crucial for the crypto securities defined by the german electronic securities act making securities truly digital and available on the chain and of course for registered bonds and the innovation and the development is taking place right now adoption is already on the way we see that third parties are starting to innovate on the environment and connecting to the environment as well as financial institutions and crucially which makes this swyat our truly financial ecosystem is that we have features already developed and available for you for primary and secondary market applications so what we offer you is already a core infrastructure where you can build up on and develop your own services for the financial industry and why we should do this and why now i hand back to martin which will give you some more information about that you're still a mute okay i'm muting is always difficult well thank you very much jonathan so obviously you ask yourself why ask why the financial industry why the dinosaurs should be able to move and would do this well i'll give you a very simple answer which i'm totally convinced of it is that we combine the future with trust currently we have a worldwide system of 11 000 banks which deal with each other and uh where there is an embedded trust into the various institutions and its functionality and i'm convinced that the potential of the blockchain is nothing worth without the trust of the customers obviously the politicians and the monetary guardians and therefore we suggest and we propose and we foster a platform by and for regulated partners and then obviously even more interesting okay you ask yourself why now well because it's now time to set a standard and as i mentioned swift as an example before obviously it's a worldwide success because 100 in 1973 236 banks joined in the meantime you have 11 000 companies and obviously it was an unprecedented success story we believe that in the fragmented and hierarchical world of settlement and transaction banking we need to come and work together so that's why we have an open rp system that's why we say okay let's let's be open for innovation it's not that we think we know it all but we are certain that given the interest of other market participants we will be able to set a standard and thus create a functioning platform which will be sort of like an app store for the future and i guess uh which i'm very very much proud of is that one more thing at this stage as of today deca bank has issued its first crypto security making the start of its business activities to maintain a crypto securities register the bearer bond hundred percent was issued on our blockchain platforms wyatt and we sold it to two german banks so another sort of proof in the pudding as you would say we successfully started our crypto business here and we should secure we're certain that we will continue that road so in order to sum it up i guess um swired from one to many that's our goal that's our mission so let's ship the industry with us together deploy your own initiatives and connect to the financial network of the future so we're happy to discuss any questions and uh yeah please come and become part of the financial network of the future and challenge us wherever you can thank you very much for to time hello hello hello victoria hello martin hello thank you very much for the keynote and congrats did you say you've just issued your first bond is that correct the first crypto security under the germany dvd so uh we're now up and running also in the with our securities register and uh the custody business will be done by sort of the middle of next year congrats fantastic so we have some questions i know some of your colleagues have already replied to them and would you like to answer some of them a bit more maybe maybe the question that you shared with us is uh how is this integrated internationally i'm afraid the global platforms rarely origin from germany i think that's a nice question to start with martin do you want to figure it out absolutely yeah well we've been talking to 40 market participants so far and this whole idea and the initiative lives of the fact this has nothing to do with germany and nothing to do with deca but it is a sort of a remote remote company which has uh which was set up in the end of this year and will be up and running by the first of january and as such we have interest especially from from the asian parts with interest from uh from uk with interest from the us and it's really an initiative which is deemed to be internationally as opposed to many platform ideas which only sort of try and target a specific issue of a specific use case and sort of you know solve that we believe that obviously we have two up and running modules and we'd be happy that if you come to us you don't have to give up your business model you don't have to give up your clients but you can come with your expertise and connect and that's what we did we also have um been able to connect to another uh issuance platform where a swedish investor issued a bond was done on an emission platform we put it on slide and then sold it to to other banks so this this exactly shows you that it only lives at the fact that together we are stronger than the single idea of us and again we don't believe that technology is really the issue we believe that how you combine interest and knowledge and expertise together and the the technology shall not be differentiating factory then i think that that covers it quite nicely i i just take over the the next question i think there's uh uh important one um regarding the the decentralization of the solution because obviously now we are we both from deca have presented the idea of swyat and um well the core part of swyat the value proposition right is by offering these network so it's why it will be its own network use it being ethereum compatible and it will be decentralized and banks financial institutions etc they will be able to be part of this core layer to run this network so that it becomes truly decentralized and swyatt itself will be responsible for developing and maintaining the network and the core but the rest regarding features and applications is up to you and after the open innovation environment we have up and running and um i think this answers as well the question if swift is just targeted ex-banks um obviously maybe we talk a lot about banks being a bank itself but banks obviously bring flow and movement to such an environment but um the platform is not sp only exclusively targeted at banks and four banks it's more about a market initiative where market participants of the current world join and work together jointly for a true ecosystem yeah i could just uh would like to stress that because um obviously we are unregulated entity we are sort of having different issues when we look at the diffie world this is like an aquarium of very many ideas but obviously we have to live up to all the regulations that we deal with and as you all know they are quite substantial so we we happy to have anyone on there but obviously those custard those participants must do their own for example alm kyc and other procedures and that's why we say you know for and from regulated entities which doesn't exclude non-regulated entities quite the opposite we very much welcome them but obviously there has to be a certain processes be built into as soon as you start then trading trading on the platform and maybe um in terms of names well lbw is interested we'll also have standard chartered interested and with a couple of others we are in a sort of sort of deeper m a discussions and uh we'll run our first financing round in the middle next year so that the uh that's why company has a sort of substantial future yeah let's check the other questions maybe we have jumped one so far well maybe maybe the business model of wyatt itself uh will clear things up as well uh i think there was in the beginning so um as i mentioned the business model of zwei is to provide the network uh to create um to maintain the network and to develop it and um of course in network itself without any applications is is the network without any fun in it and uh which is why we have already um decentralized applications up and running and um which will be as well part of the business model of wyatt itself so um we have a few applications running enabling us to do all these kind of transactions um as you have seen to achieve what we have achieved so far um but this is open and you can reuse it connect it differently and develop your own idea so i think regarding the time there is only the option for us to stress that we invite you to join our initiative to join swyatt um to deploy your own services on it and to connect to it and expand the network and um maybe run a node et cetera we will see uh contact us and wyatt deca dot d or join us in our booth and our virtual booth and and talk soon absolutely thanks a lot jonathan and maybe just last word from my side is uh i've seen the question is crypto blockchain is an existential threat to the banking sector i would put it quite differently i would say it's a unique chance for the banking to get rid of a fragmented infrastructure and move from the old world to the new world so there's a lot for for us for the financial services industry in it because it can overcome certain hurdles which are there which you know are not necessarily sort of the most profitable areas so therefore we look at look at it as a very very good chance to keep in business to actually sort of especially if you look at blockchain with its decentralized function it's the one and only chance for custody and other banks to maintain their role because in the past we've seen quite different initiatives to put all eggs in one basket if you look at the global ccps and others and hence we think blockchain especially for decentralized organizations offer a great sort of chance to to run our business thank you very much for your attention thank you so much martin and for a great keynote and as you said joins wyatt network building on it or maybe next year you want to be one of the institutional investors on board i think there is plenty to do with with this fire so so join your unit 10 and martin thank you so much for a great keynote