Asset managers quick to adopt blockchain

Blockchain — the transaction database technology underpinning the bitcoin currency — is being used by hundreds of investment companies and wealth managers around the world, as more businesses see its potential to transform financial services.Research by Roubini ThoughtLab has found that 225 of the 500 asset managers it surveyed had implemented the technology, which allows transactions to be verified electronically over a network of computers, with no central ledger. Overall, two-thirds of the companies questioned said they expected to be using blockchain within five years.For financial services groups, blockchain is attractive as it means there is no intermediary to pay for certain transactions — offering scope to cut costs. A Santander report published in 2015 suggested that global banks could save up to $20bn a year by 2022 by implementing the nascent technology. However, the widespread introduction of blockchain could also drive many ill-prepared asset managers out of business, according to the Wealth and Asset Management 2021 report by Roubini ThoughtLab — a consultancy co-founded by author and economist Nouriel Roubini. “Technology is a tsunami that will radically change the face of financial services,” Prof Roubini said. “The losers will be those companies that are not nimble enough to adopt the new technology — and a lot of them may disappear.”