A NY Wealth Management Firm Demos Asset Tokenization on Blockchain

Synechron, a consulting firm focusing on financial services, is applying emerging digital strategies such as asset tokenization in the rapidly growing wealth management industry.

The New York-based company earlier this month launched its Wealth Tech Accelerator program, which aims to marshal technology, data science and analytics in support of wealth management firms. The scope of Synechron’s endeavor ranges from developing new blockchain-based investment channels to improving the client onboarding process.

Firms in the wealth management industry are looking to attract and retain high-net-worth investors, which represent a steadily expanding pool of assets. According to the global tax and advisory firm EY, net investable assets already top $55 trillion globally and are expect to grow to nearly $70 trillion by 2021. “Wealth managers should be anticipating and seizing this market potential and enormous growth now,” noted EY’s wealth management outlook.

The asset tokenization component of Synechron’s Wealth Tech Accelerator could potentially, over time, cultivate a still larger pool of investors and capital. Asset tokenization fractionalizes the ownership rights to different types of assets – from fine art to real estate – into digital coins, or tokens, via blockchain. Blockchain is used to manage those rights. Tim Coates, who heads the blockchain business at Synechron, believes asset tokenization will create new investment opportunities in the wealth management space, with smaller investors, in particular, standing to benefit.

Tim Coates, Head of Blockchain Dept at Synechron (on the photo above):

“People excluded because of lack of size can buy into non-traditional assets.”

Coates referred to Synechron’s asset tokenization accelerator as a concept it is demonstrating for customers, rather than a product it is ready to monetize. The company’s asset tokenization demo is based on the Ethereum public blockchain and uses open source protocols. Those components include Harbor, a blockchain-based platform and compliance protocol for tokenized securities, and 0x, a protocol for decentralized exchanges — peer-to-peer marketplaces for asset-backed tokens.

The objective for asset tokenization technology is to provide the controls and feature sets regulated securities require, Coates explained.