Blockchain or distributed ledger technology is the underlying and fundamental technology that has brought a transition from a web of information exchange to a web of value exchange. It is the key foundation over which crypto assets have been developed. Blockchain is today applied in finance, retailing, manufacturing, and the wealth management industry. Despise Blockchain being considered a disruptive force, yet it has a transformative effect on different industries particularly on the wealth management industry.
Wealth Management Services Adoption of Blockchain
The time for the wealth management industry to embrace blockchain technology is now! The adoption of new technology is occurring at a fast pace since the wealth management industry is still running on business models based on decades-old technologies. Additionally, now, there is a growing recognition amongst wealth management clients of the significant opportunities offered by such digital assets. When wealth management firms opt not to offer their customers an insight into the new technologies, it is not the smartest decision! Wealth managers should carefully follow what these technologies are to offer: how can they provide new investment and diversification opportunities for clients, because once these technologies become mainstream, it might become difficult to try and catch up to them!
Today, clients are more and more curious and intrigued about digital assets, and are interested in embracing this new technology for broader purposes, from improving interbank transactions to regular reporting. Reducing transaction times and costs, securing a successful and smooth onboarding for clients, providing new investment and diversification opportunities to their customers, can all be approached when wealth managers consider implementing these new technologies. Unlocking liquidity in traditionally illiquid markers offers great opportunities and delivers efficient investments on various levels.
Blockchain transactions easier and more fluid
Blockchain technology which centers on decentralization, consensus, fast and cheaper transactions can make all transactions easier and more fluid, and renew existing business models. When Wealth managers introduce Blockchain technology to their customers, various are the services and processes that can be improved. For instance, client onboarding is considered a challenge in financial services since its process is time-consuming and often susceptible to errors. Additionally, when it comes to this process, any delay can have a drastic and costly impact in a highly competitive market environment. With blockchains, this process could be easily approached. Blockchain technology ensures that this onboarding process can be streamlined with easier KYC, this technology brings a whole range of use cases built for real-time settlement, exchange of money and value, ensuring data privacy, and this technology uses smart contracts that are more secure and tamper-proof.
The use of blockchain technology is not only limited to make the onboarding process easier and more successful, however, this technology also focuses on different transactions. It stores every transaction that occurs in the nodes, substantially eliminating the need for trusted intermediaries. With blockchain technology, transaction costs can be greatly reduced, while continuing to have a great and positive impact. This technology ensures a reduction in counterparty risks and ensures a reduction in risk management costs. The wealth management industry can make use of blockchains to reduce the cost of transactions, to gain time, and increase security.
Blockchain Tech benefits in Global Wealth Management
While blockchain technology is of tremendous help in terms of how it reduces costs, increases security, ensures smooth and effective processes and transactions, yet this technology is still in the process of experimentation. More and more investors, wealth management firms, financial institutions, and other institutions are interested in blockchain technology and how to implement and use it. Blockchain technology is developing in a tremendous way to the point where it might become a new “norm”. However, as it is in course of development, time will be the proof in terms of how this technology will be beneficial and helpful.