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Blockchain is both a disruptive and revolutionary force. It's how the wealth management sector is changing.
FREMONT, CA: The primary foundation for crypto assets is blockchain or distributed ledger technology. The blockchain can get conceived of as a foundational technology upon which other technologies can get constructed.Investigating blockchain for use in finance, retail, entertainment, and even manufacturing. The potential, on the other hand, is nothing short of game-changing for the wealth management business.
Client onboarding is a complex undertaking in the financial services industry since KYC/AML (Know Your Customer/Anti Money Laundering) compliance can be time-consuming and error-prone. It's not only a question of money and time when it comes to executing these tests.In a highly competitive market context, delays can have a significant opportunity cost, especially since FinTech firms are putting a lot of emphasis on this element.
Such procedure might be costly using blockchain technology, which allows for easier KYC, more secure and tamper-proof smart contracts, and the capacity to securely record transaction histories while preserving data privacy and non-repudiation of origin.
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With blockchain technology, reducing transaction costs drastically while settlement times get sped up. It would also get complemented by a reduction in counterparty risks and cost savings in risk management. The wealth management business can leverage blockchain technology to compete on price, which is already under pressure from Robo-advisors and other low-cost competitors.
While blockchain technology has many benefits in terms of lowering costs and boosting security, it also has a unique opportunity for wealth management clients in terms of new investment choices. Diversification and the potential to participate in an intriguing and quickly expanding new asset type get provided by cryptocurrencies or assets driven by distributed ledger technology.
Asset tokenization has the potential to open up a slew of new possibilities for alternative investments and crypto asset management. The added security and lower transaction costs are just icing on the cake.
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