Sitting conveniently between the New York Federal Reserve bank’s 500,000 bars of gold and Wall Street you will now find consulting firm Deloitte’s newly launched blockchain laboratory.
Measuring approximately 3,000 square feet, the latest in a planned series of such locations now offers a one-stop shop for the increasingly crowded field of companies looking to turn shared distributed ledgers into enterprise grade applications.
Staffed by a diverse team of blockchain coders, UX/UI designers, tax attorneys and compliance experts, the location on the 49th floor of a dark skyscraper is no accident, according to Deloitte’s head of global financial services, Joe Guastella.
The space overlooks the Empire State Building, Brooklyn and New Jersey, placing it not only a two-minute walk from Wall Street, but only a short train ride from Chelsea’s Fashion District, Brooklyn’s new-wave of industrial manufacturers and the shipping avenues of both New York’s East River and the Hudson.
According to Guastella, who on Thursday helped formally open the laboratory, the site was chosen because of its unique access to many of the 23 different industries he believes Deloitte’s blockchain products can serve.
In conversation with CoinDesk after at the launch, Guastella said Deloitte generated a record $36.8bn revenue last year, and that it hoped to use the lab to stay competitive as a wide range of firms fight for blockchain dominance:
“We want to be in the field with our clients. We want to be right there to make it easier to get here, easier to work with.”
Gathered for the launch event were about 100 people, including representatives of legacy banks like Goldman Sachs, industry advocates from the Digital Chamber of Commerce and startups such as Loyyal, whose blockchain-based loyalty rewards software was integrated into one of four proofs-of-concepts being demoed at the event.
Drinks and demos
Drinks and hors d’oeuvres were served, at this second launch of what the consulting firm calls a “Grid of Deloitte” lab.
The lab is currently staffed by 20 people, a number that Deloitte principal Eric Piscini expects will grow to 50 people by the end of the calendar year.
Many of those employees – selected specifically to help professionals build blockchain products in diverse industries – were on hand to demonstrate some of around 200 proofs of concept (PoCs) from Deloitte’s “library” that were also unveiled at the event.
Four of those PoCs were demonstrated in different rooms of the lab, which is housed within Deloitte Digital, a practice that supports a wide range of consulting services, including behavioral economics, human design and a creative ad agency.
Demonstrated was a trade finance application using the Nuco platform to simplify the way trade loans are issued, a cross-border payments application that was built using Stellar, a reinsurance application built using Monax, and a loyalty rewards app created with software from Loyyal.
Loyyal co-founder Sean Dennis says that since he and four other startups formally partnered with Deloitte last year, most of the work has occurred remotely or at different Deloitte locations.
But with the opening of the laboratory, he and his New York-based team believe the consulting firm has “solidified” its commitment to the blockchain industry.
He explained that Deloitte is now using the lab to pitch his and other applications to clients from the diverse set of industries at home in the city, adding:
“The nice thing about that is, though it’s one application, it’s a nice easy way for companies to get to know and get comfortable with the technology with very low risk.”
There’s a catch, however: as more and more industries embrace blockchain, Deloitte itself is being transformed.
As a result, the firm – the revenue of which grew 9.5% last year – will likely look dramatically different when next year’s annual report is filed.
Even so, blockchain’s impact on Deloitte has been inconsistent, according to Guastella, who said different divisions have implemented the technology with varying success.
The most heavily impacted division within Deloitte’s financial services practice is capital markets, followed by banking, he revealed.
One of the fastest growing divisions, though, is insurance, which Guastella said was “much less impacted” six months ago, but is now being disrupted with services such as the reinsurance demo built with Monax’s open-source software.
“There’s different degrees of how much impact [blockchain’s] had based on different lines of business,” said Guastello.
Among the least affected were the property and casualty insurance divisions, while some, such as asset management, are barely being impacted by blockchain at all. Instead, those divisions tend to focus on other solutions in Deloitte Digital, such as so-called ‘robo-advisors’ that use AI investing algorithms, for example.
Expanding the grid
Though the New York blockchain lab is ultimately to be part of Deloitte’s ‘grid’ of labs, the network is currently more of a straight line.
The first dedicated blockchain facility was launched in May 2016 in Ireland, with similar plans to grow to 50 employees by the end of this year.
In the future, according to Deloitte principal and owner Eric Piscini, a location is possible on the west coast of the US
Piscini, who also helped kick off the lab’s opening, hinted to CoinDesk that Silicon Valley or another industry center on the other side of the country might be next.
“The west coast isn’t as active as here because it’s financial services driven,” said Piscini. “But tomorrow other industries are very active, and they may want to be active in places other than New York.”
Ultimately, though, the next location will be determined by market demand, he added.
In an opinion piece for CoinDesk last week, Piscini described 2017 as a “make or break” year for the blockchain industry.
If real-world applications don’t start making actual industry improvements, leaders in potentially disrupted sectors could face “fatigue” and lose interest, he wrote.
To make matters more dire for Deloitte, the consultancy firm is relatively late to the game when it come to expanding its grid.
Last June, IBM opened a “blockchain garage” in the hip New York neighborhood known as SoHo. That lab is part of a network of ‘Bluemix Garages’ that had already opened across the globe. Then, last September, French bank BNP Paribas opened its own ‘Innovation Zone’ in New York City with a specialty in blockchain.
In fact, going as far back as October 2015, British bank Barclays had already opened its second ‘Rise’ FinTech accelerator, and even signed contracts with two startups that had passed through the program.
But Deloitte principal and one of the leaders of Deloitte Digital, Thomas Jankovich, told CoinDesk that considering the rapid rate the distributed ledger technology has matured, he and his fellow executives hare “very happy” to be “late to the game.”
“What we’re doing at this lab is we’re developing real, working, solutions, that have the highest potential for industrial scale. We’re not looking at shiny objects, we’re not trying to see if it works, we’re looking for platforms that work for a client.”
Launch images via the author