Forget Robos -- Blockchain Could Revolutionize Advice
The wealth management industry could cut down on costs and boost data security by using so-called blockchain technology, a distributed ledger made popular by Bitcoin, equities.com writes.
Originally devised as the underpinning technology for tracking and verifying transactions of the infamous cryptocurrency, blockchain has since been adopted for other uses – particularly because transactions and data entered into a decentralized peer-to-peer network are unalterable, according to IBM.
For wealth management firms, blockchain technology can offer a decentralized way to store client data that’s far more resistant to cyberattacks, equities.com says. Blockchain may also provide a more efficient and cost-effective way to store data compared to alternatives, according to the website.
And because all transactions recorded in blockchain cannot be changed, the technology can simplify and streamline the auditing process, equities.com writes.
Blockchain essentially provides an immediate and reliable audit trail for all information entered into it, according to the website. The fact that the data can’t be altered can also help wealth management firms better handle their contracts, equities.com writes.
Blockchain technology could act as a contract manager, which can help firms ensure all parties in an agreement meet the terms and conditions of a contract while reducing ambiguity and errors, according to the website.