Unlocking Blockchain's Potential: A Guide for Asset Managers' Strategic Transformation

Unleashing Economic Benefits with Blockchn: A Guide for Asset Managers

As awareness grows around distributed ledger technologywidely known as blockchna significant transformation in the approach to financial assets and the functioning of the global financial industry is on the horizon. Though a comprehensive solution, the journey towards widespread adoption will likely be lengthy and uncertn; however, there's a growing consensus that it represents an opportunity that cannot be ignored.

Our collaboration with J.P. Morgan equip asset managers with regarding blockchn technology's potential evolution, impacts, and proactive steps they can take. This document serves as a roadmap for understanding blockchn’s progression, its implications on the industry, and strategies for action by senior management teams seeking to stay ahead of the curve.

Chris Allchin, Partner at Oliver Wyman, offers insights into critical questions about blockchn:

1. Why Has Blockchn Taken So Long to Emerge?

   The essence of blockchn lies in combining proven technologiespeer-to-peer networking, asymmetric cryptography, and hashingand reimagining them for banking activities by reintroducing accountability and governance.

2. Why Is Blockchn a Credible Solution?

   A significant factor influencing the credibility of blockchn is the widespread attention from market participants, including new initiatives driven by startups and collaborative industry groups focused on setting technical standards and fostering cooperation.

3. When Will Blockchn Be Utilized in Asset Management?

   Immediate applications focusing on robust data sharing are already emerging, primarily centered around three areas: enhancing data consistency between parties, streamlining messaging through a distributed ledger, and optimizing documentation processes. Expect numerous deployments within the next 3 years.

4. Could Blockchn Revolutionize Capital Markets?

   While it remns uncertn if blockchn will lead to an entirely decentralized infrastructure as envisioned by some pioneers, initial implementations are likely to be managed by regulated providers. Yet, there is potential for disruptive change through issuer- investor interactions on open-source platformsthough the timeline for this development is yet to be determined.

5. What Benefits Can Asset Managers Realize?

   The most obvious benefit is cost reductionover half of typical asset management costs are anticipated to be addressable by blockchn technology. Potential revenue growth from improved data quality and increased liquidity may also emerge, facilitating innovative service delivery for clients. Ultimately, -users stand to gn the most as providers compete using blockchn capabilities.

6. What Work Should Asset Managers Start Now?

   Three critical areas demand asset managers' attention:

   • Engaging in developers and regulators on significant implementation decisions.

   • Fostering external efforts toward use cases that directly benefit asset management operations.

   • Identifying early deployments capable of creating competitive advantages.

   These actions are vital for maximizing the benefits from blockchn technology.

7. Is Blockchn a C-Suite Priority?

   The development and implications of blockchn necessitate C-suite involvement. Senior leadership teams must grasp its potential impact on business strategy and ensure their organization's response is appropriately sized to capitalize on opportunities and mitigate risks.

In summary, this guide serves as a strategic foundation for asset managers navigating the blockchn landscape. By understanding blockchn’s journey, recognizing the current developments, preparing for future impacts, and taking proactive steps, senior management teams can position their organizations for success in the evolving financial world.
This article is reproduced from: https://www.oliverwyman.com/our-expertise/insights/2016/jul/unlocking-economic-advantage-with-blockchain.html

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