“Our industry will continue to be under pressure, in terms of gross margins. It’s no doubt,” said Ermotti. “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.”

With reference to the financial industry, Ermotti said that blockchain technology will allow the “freeing up of resources to become more efficient” and that it’s “a great way to allow us to reduce costs.”  Furthermore, Ermotti said blockchain technology will prove to be transformative to the industry’s cost base within five to 10 years.

Last fall, UBS joined a blockchain partnership called Batavia with IBM, Bank of Montreal, CaixaBank, Commerzbank, and Erste Group last fall and performed its first experimental transactions in April by sending cars from Germany to Spain and furniture production textiles from Austria to Spain.  It will be a wait-and-see affair to determine whether other companies that operate within the financial sector follow suit and how the ETFs that carry these companies respond.

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