New research with institutional investors and wealth managers reveals that over the next three years, 50% believe there will be a ‘dramatic’ increase in the use of blockchain technology within the asset management sector, and a further 44% think there will be a slight increase. The study is from Global Palladium Fund (GPF), which recently listed four metal Exchange Traded Commodities (ETCs) and is the first ETC provider to use Blockchain technology to record bar information into Distributed Ledger Technology thereby providing an extra layer of security and proof of ownership to the Issuer. The use of Blockchain is in addition to the traditional recording processes used by the custodian.
When asked what they think is the main reason why blockchain will become increasingly important for asset managers, 51% of professional investors interviewed said it is part of the growing trend to provide more transparency around investments. Another 35% believe it is due to investors increasingly wanting more information on the investment vehicles they invest in, followed by 12% who said to meet growing regulatory demands. Some 2% believe the main reason for the growing use by asset managers is to reduce costs.
The findings reveal that 90% of professional investors believe that over the next five years, investment management firms will come under growing pressure from clients to use blockchain technology to provide greater security and transparency around their work.
Alexander Stoyanov, Chief Executive Officer of GPF said: “The asset management industry is becoming more competitive and challenging in terms of meeting client demands and regulatory requirements. We are the first ETC provider to make use of blockchain technology, using it to create an immutable record of metal ownership by the ETC. This is the first step in the use of blockchain to introduce greater transparency for investors in precious metals.”
Timothy Harvey, Chief Executive Officer and Founder of NTree, said: “Blockchain has many potential applications from trading through to reporting and regulatory requirements. In the long term, this will translate into greater efficiencies, transparency and cost savings.”