The Digital Lifecycle - Are You Ready?
The “Digital Lifecycle Is Already Here - Are You Ready?” panel was moderated by Martin Dobbins an independent director and advisor to boards and technology firms and featured Olivier Portenseigne of FundsDLT, and Jack Ehlers of Bitstamp. Regardless of the recent gyrations around crypto, the fundamentals of blockchain technology remain a factor that boards need to understand.
Martin highlighted, there are many aspects of the digitization ecosystems that boards are encountering today. The type of digital assets that asset manager are investing in, the evolution of the technology infrastructure, exchanges, digital custody, new distribution models...etc. And the ongoing regulatory changing to these technologies, i.e., Cloud, Blockchain, AI/ Machine Learning, APIs …. etc. The question is how are board’s addressing these changes and challenges.
FundsDLT use distributed technologies to connect the funds industry, and Olivier sees no let-up in the creation of digital products and assets, but also the development of digital infrastructure to create new services and streamline existing processes. “These trends are changing the industry from front to back, so it's not only asset managers and funds, but it's also the wealth managers and how they distribute their product,” he said.
“The term digital asset means different things to different people, but it represents everything that features in the digital world,” said Jack. As well as crypto currencies he mentioned tokens that prove the authenticity of digital collectables and real assets such as property or art works. As well as over-the-counter sales to clients, Jack sees institutional investors becoming more engaged, whether that be for the creation of funds or proprietary trading. Wealth managers are also involved.
“We differentiate digitalisation from tokenisation,” said Olivier. “Digitalisation is the backbone of what we do: using the blockchain to remove friction in the fund supply chain. Tokenisation comes more as digitalising by creating security tokens or fund shares to ease distribution and penetrate new channels.”
The former is about market infrastructure, that Oliver said was about cutting costs but also adding functionality such as personalised services and increasing transparency for the investor. “We see more and more co-creation between asset managers and the distributors,” he added. He also discussed how these technologies and the options they create can be used for KYC challenges.
Jack expanded on the direct-to-customer possibilities opened by decentralised finance. “This is the opportunity to go directly to the issuer with a crypto asset or a security token, with the right regulatory framework: that's an enormous use case,” he said. Cost and time improvements would result, even if he noted “we're nowhere close to fully digitising KYC, but we will with so many working towards this.”