Home Features Is blockchain a game-changer for the asset and wealth management industry?
Blockchain is one of the key technologies to have emerged in recent times and has now captured the interest of financial services
Wealth and asset management has become an incredibly valued service to those with money saved up and capital they are willing to invest. As such, those who run a business in the industry are constantly looking for solutions to make their service as stellar, efficient and cost effective as possible.
Blockchain is one of the key technologies to have emerged in recent times, and has now captured the interest of many different businesses operating in the financial services sector. Here are some of the ways it might aid the wealth and asset management industry.
It is easy to envisage the high costs of security for asset and wealth management firms, as they are dealing with significant amounts of capital on a daily basis. Now that data is universally stored digitally (for the most part), online security is essential to business operations.
Blockchain is known to be one of the most secure and hack-proof systems in the world, storing data and facilitating transactions in a revolutionary, safe way. This could mean that wealth and asset data which is stored on the network is far safer than the data stored on a decentralised system.
One of the most fascinating developments in recent years has been that of cryptocurrency, most famously bitcoin. Cryptocurrency exists solely as an online currency, and has become an incredibly valuable asset due to its exponential and unprecedented rise in value.
Blockchain was originally built in 2008 to facilitate bitcoin exchanges, and it is likely that bitcoin will come to be viewed as a popular and important asset for wealth management firms to handle. As such, an understanding of blockchain and the way it works will be a necessary part of their business operations.
As blockchain’s potential uses are explored further, more and more companies are likely to adopt it into their business operations. As such, there may well be opportunities to cut down on costs, especially with regards to transactions and communication.
Real-time settlement models have the ability to introduce significant, cost cutting solutions to financial transactions, and as such facilitate a move towards a potentially cheaper service (which may well entice more potential customers).
It is worth noting that, in comparison to established financial technology, blockchain is still in its infancy, and the true extent of its potential is yet to be discovered. The wealth and asset management industry is one which is already exploring the uses of blockchain, however, and it is likely that it will continue to be incorporated into the industry for many years to come.