Asset owners and managers not ready for blockchain

Asset owners and managers not ready for blockchain

More than half of asset owners and managers think that blockchain will be widely adopted in the investment industry in the next five years, yet many admit they do not know enough about it and hardly any have begun experimenting with the technology, according to a State Street survey.

The survey, conducted in partnership with Oxford Economics, shows that 74% of asset owners believe blockchain will achieve the scale needed for adoption, compared to only 42% of asset managers. But, despite asset owners’ optimism, nearly half say they don’t know enough about it, and asset managers are even less confident, with 78% noting that they need more education.

And, while there may be a constant stream of stories about financial services firms carrying out distributed ledger pilots and proofs of concepts, just seven per cent of those quizzed by State Street currently have initiatives underway to support blockchain-based concepts.

"A majority of institutional investors are well aware that blockchain, an ‘emerging technology,’ could become an everyday application in the near future," says Antoine Shagoury, global CIO, State Street. "What’s clear from our research is a lack of readiness and uncertainty for how to best plan for this disruption, and a need for more education."

More than three quarters of those surveyed agree that blockchain will have the greatest impact on IT departments, suggesting that they recognise the need to hire in talent. Additionally, 81% of asset managers agree that the adoption of blockchain will equally disrupt their own jobs on investments teams.

While cryptography is a core component of any blockchain infrastructure, nine-out of-ten respondents worry about how security implementation will address existing and future requirements.

Meanwhile, more than half of asset managers think that blockchaina are most likely to be used privately by companies with their clients. Just 13% see the technology being broadly used by the public.

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