Satya Bajpai, Head of the blockchain and digital assets investment banking, JMP Group
In an exclusive interview with CIOReview talks about the multi layered challenges as well as the positive impact created by blockchain.
What are the different trends in the Blockchain and AI space?
Before being a part of JMP Securities, I was an advisor for transactions in the merger and acquisitions sector. My roles and responsibilities consisted of assisting clients in Initial public offerings (IPOs), analyzing their businesses, and supporting them from an investment perspective. With the requisite knowledge of technologies, I would like to share my insights on the two trending technologies- AI and Blockchain. Companies are using these technologies as a functional prototype that is in the process of either building proof of concepts with their clients or are trying to generate revenue around a product. The process can help to differentiate amid the winners and losers of the marketplace by analyzing how these successful players ace their projects that require a research mindset.
Well, I see many companies who create superior technology, but that’s not all that the market needs; it demands a more customized solution that is scalable and can be applied to a particular use case. Now, when I talk about the two most trending technologies, blockchain and AI, they are solving specific problems in the business continuum. That’s where my next point comes- the collaboration involving blockchain and AI is answering real business use case in the fintech landscape, healthcare, and other markets too. As an investment banker with JMP Securities, we focus majorly on technology as the vertical.
Can you shed some light on the challenges that are prevailing in the Blockchain and AI market?
From a business and technology perspective, there are different challenges in the marketplace. The critical problem from the business point of view is the ability to generate revenue and create a solution that solves a particular use-case. For instance, if you look at any successful business, they develop a solution that addresses specific use case and monetizes it well before launching it to other areas; specialization is the name of the game.
One of the vital services that we provide is sell-side advisory where we help the board and senior management of the business in the sell-side process as they look forward to selling their business to some of the significant financial buyers
What I find is that a lot of such companies tend to specialize in one flagship product. A company with only a single product entirely focuses on the product’s further development, provides attentive customer service, and effective marketing. So that’s from the business perspective, which is the challenge number one. Blockchain and AI trends go a little bit cyclical in terms of market preferences for particular investments, and that’s a little bit less in an industry’s control but is essential for every company to understand and strengthen their position; so this is the business level challenge. On the technology level, I see that clients prefer blockchain technology as it provisions verification, security, and transparency without having to be dependent on third-parties. Although scalability and cost of implementation can become issues for some clients, they can be resolved through different platforms. By devoting the required time, most of the software infrastructure can be developed in an enterprise ecosystem, which could further assist in building a refined blockchain framework.
What are the strategic points that you go by to steer your company forward?
With JMP and as an investment banker, I spend much time with large corporations that are looking for the right opportunities to buy a company; therefore, we invest our time figuring out what interests them. One of the vital services that we provide is sell-side advisory where we help the board and senior management of the business in the sell-side process as they look forward to selling their business to some of the significant financial buyers. Therefore, positioning our client’s business becomes one of the critical strategic decisions that have to be analyzed, both from a top-down and bottom-up approach. The bottom-up design begins with low-level design and ends with a high-level development or design, thereby understanding what the business specialization is and how does one position that strength effectively to potential buyers. The top-down approach starts with a bigger picture and boils down to smaller segments, significant enough to understand various market trends. In other words, while partnering with a blockchain firm, we assure that our clients are aware of the vulnerable spots related to the technology and address them ahead of time.
Where do you see the Blockchain and AI technology in a few years from now with regards to the kinds of transformations that are happening?
Blockchain is not regarded as a competing technology; people see it as a capability that is going through an evolutionary maturation. Most executives are open to adopting it but are worried about its implementation, and that’s what differentiates us from the rest of the market. Although AI is all about making machines smarter and assist in the decision-making process, it is a bit customized to datasets and may not always provide one with the right information. Hence, it has to be personalized as per the needs of the enterprise because of the way one stores data affects the quality of the analysis. It is challenging to create a universal solution, but with blockchain having a standardized dataset and trust protocol, many problems can be resolved. Besides, AI can also assist blockchain connoisseurs by optimizing energy consumption, mining hardware, and improving its overall performance.
Do you have a piece of advice for all those aspiring professionals in your field?
I would say that when people think of integrating AI and Blockchain, they need to consider three factors – people, process, and technology. Using the best technology is always a good idea, but if it doesn’t match with your client’s infrastructure, you will end up trying to fit a square peg in a round hole, which is not desirable for your customers and partners. Hence, it is vital to understand the process, what use cases you are trying to solve and design the technology around the process accordingly. Thus, following all the three aspects that are people, process, and technology of any project and managing them is the key to success for any organization.