Blockchain technology, also known as distributed ledgers, has a number of potential use cases within the wealth and asset management life cycle. Distributed ledgers are highly flexible; once implemented, they can be used to remove friction from the client onboarding process, streamline management of model portfolios, speed the clearing and settlement of trades, and ease compliance burdens associated with anti-money laundering (AML) and know your customer. The result is elimination of redundant functions, reduced operational expenses and increased opportunities to enhance the client experience. While blockchain technology is unlikely to replace current systems, it may be used to reconcile information across them or enable new infrastructure for new markets and products.
By extension, these concepts can expand to broader applications, such as rollovers, trusts, estates, insurance and other transactions where assets are moved between parties or contracts are executed. A distributed ledger supports the validation and execution of a transaction in near real time. The client experience is enhanced and the process streamlined, and costs are reduced.


Blockchain can be leveraged to build a client profile in a much more efficient way. Storing client profile data on a blockchain allows for data points — profile data, preferences, net worth, account information, social media profiles — to be shared as needed, with each individual block of data being stored securely, but permissioned for access by the individual (read, write, edit) as needed.


Blockchain presents the possibility of revolutionizing client onboarding for wealth managers. In today’s world, potential clients must provide proof of identification, residency, marital status, sources of wealth, occupation, business interests and political ties. Going through this process can take days or weeks to collect and verify the data.


• Strict onboarding requirements • Proof of identification
• Residency
• Marital status

• Sources of wealth • Occupation
• Business interests • Political ties


• Profile stored on a blockchain/distributed ledger
• Trusted parties are granted access to all or part of the profile based on cryptography • New relationships would be initiated by profile owner
• The system inherently enables an audit trail for tracking changes to the chain. As a result, processes requiring fact-checking, such as AML, are simplified
• Integrate blockchain technologies into onboarding and ACH and ACAT systems and processes

Complying with numerous reporting requirements, Information security procedures, Ongoing monitoring of profiles, Automated clearinghouse (ACH) and automated customer account transfer (ACAT) systems, take multiple days and involve manual processes using multiple systems and databases


Can facilitate many key functions of onboarding:
Client and risk profiling
Financial planning
Anti-money laundering checks and money movement
Can enhance or possibly replace traditional systems, such as ACH and ACAT
Enables near-instantaneous transfers of assets between financial institutions with authenticated provenance of tracked changes


Exploration of blockchain technology and its application to financial services firms is still in the early stages, and many wealth and asset management practitioners are not very familiar with how blockchain actually works or what the benefits might be. Additionally, there are many critics who claim that blockchain technology is “looking for a business problem to solve,” and we agree that business cases should drive technology solutions, not the other way around.
Yotta research indicates that scalability is expected to be a hurdle to industry-wide adoption for many organizations. To date, blockchain has seen limited deployment in situations requiring large volumes of data, and the linear nature of the technology calls into question its ability to handle such a volume. In addition, firms face product complexity limitations, as initial rollouts of complex products can be difficult to change later on the distributed ledger.

This comes as no surprise when current institutions are able to handle billions of transactions with a high degree of reliability and security. Bitcoin blockchains, for example, can only achieve 7 transactions per second compared to Visa’s VisaNet, which currently achieves 50,000+ transactions per second. There are also significant unknowns related to the regulatory and legal hurdles that exist in wealth and asset management, such as the custodial requirements if assets are held on a blockchain network at any point. Other barriers to widespread adoption include data privacy and the high cost of replacing legacy infrastructures. Despite these challenges, there is a belief that blockchain technology can be applied to solve business needs for wealth and asset management firms’ middle and back-office internal processes first, before there can be widespread impacts to industry business models.


Blockchain is a difficult topic to understand, and determining a good business strategy for using it is even tougher. While many technologists can grasp the concept and the underlying algorithms, many business leaders are unsure of how it can benefit their business in a meaningful way, or where it can disrupt current models. To accomplish this, EY recommends breaking strategy development into three key phases: first, identify the opportunities for the technology; then, focus on developing innovative solutions to capitalize on the opportunities; and, finally, work with your technology partners to successfully implement the solutions.

The first step in developing a strategy is creating an opportunity framework to identify where the emerging benefits might exist and which areas of the business are the most vulnerable to disruption. There are a handful of firms finding some early successes, and the ones that are making headway are taking a strategy-focused approach.
We recommend that as firms examine the opportunities, they look internally first, as it is much easier to develop and gain adoption within your own firm. As smaller internal solutions begin to gain traction, firms should look to expand the solution internally — across functional groups and then across lines of business — to demonstrate efficacy and gain support and momentum. Finally, once internal support is obtained, business cases and development for altering existing revenue-generating business models should be examined.

With so many potential blockchain opportunities, establishing an effective framework to identify real business value is critical. As noted in the previous section, there are use cases that can be developed quickly to drive results. Firms should focus on those use cases that have the greatest opportunity with minimal risk, and use a framework to properly allocate time and resources. In addition to creating blockchain specific use cases, blockchain should be considered an enabling technology to the challenges of business-as-usual operations. To this point, firms should expect blockchain disruptors to emerge where operational overhead and data management issues exist or where potential revenue- generating opportunities are driven by transparency and ease of use.


With so much confusion regarding FinTech and blockchain, many firms are unsure of where to turn next and how to spend their very limited strategic dollars.
Given that the success of a blockchain solution rests in its distributed nature and the willingness of the participants in the chain to work together, many firms are shying away from an initial aggressive approach. However, to be successful within an industry such as wealth and asset management, a firm or set of firms must take the lead and begin the innovation process. Ultimately, these are the firms that will stand to benefit the most, as they will reap the initial rewards of the technology.