Will Blockchain Technology be the Ultimate Disruptor? Harvard Says Yes!

Say goodbye to the middle-man for your financial transactions. Blockchain technology will change the way you do everything.
     By Marissa Levin 
Founder and CEO, Successful Culture@marissalevin

 "Imagine a technology that could preserve our freedom to choose for ourselves and our families, to express these choices in the world, and to control our own destiny, no matter where we lived or were born. What tools and jobs could we create with those capabilities? What new business and services? How should we think about the opportunities?" 
— Don Tapscott and Alex Tapscott, Blockchain Revolution, How the Technology behind Bitcoin is Changing Money, Business, and the World

Until recently, we've relied on trusted intermediaries to send information over the internet. In 2008, a pioneering payment method and cryptocurrency entered the market–bitcoin. The technology behind it, called blockchain, has forever changed both online payment and information sharing networks.

To learn more about this emerging business technology, I interviewed blockchain expert Jeremy Epstein.

Blockchain's claim to fame is its ability to fully encrypt personal data on the internet, allowing for the digital translation of assets and the elimination of need for a protective middle man. Essentially, this new cryptotechnology enables secure-funds transactions and ensures that data cannot be hacked by outsiders.

Epstein explained that blockchain is a "distributed ledger." It's not a database sitting in an office. It's a database that everyone can access.

"We're seeing decentralization and a paradigm shift of moving from institutions to ourselves. Power has been given back to the business owners, who no longer need to rely on the permission of banks and governments to send money electronically," says Epstein.

When you use a bank as an intermediary to transfer funds to another person by check, each person involved in the transaction has a separate record. The bank doesn't know right away that the person writing the check has a balance to cover the amount written out–there is an element of trust, and things can go wrong.

Epstein stated, "We've been built to have other organizations be custodians of our assets (like banks). However there have been more and more violations of our data–just look at the S & L scandal, 2008 mortgage crisis, and common accounts of fraud."

Conversely, Blockchain allows for privacy in the combination of records and the elimination of any intermediaries. Both parties can view the encrypted ledger and see any mutual transactions, but no one party controls it. Rather, each transaction is a block that is added to a chain once all parties affirm the block is correct. The chain itself is protected by cryptography.

Epstein asserts, "nobody can manipulate the system or go back and over-write it. It is chronological and time stamped." Overall, this technology is empowering people worldwide to push costly intermediaries to the side by giving them the ability to both authenticate and perform direct, immediate transactions with others.

Epstein explained that "Anything valuable can now become digitized. What's so powerful about blockchain is that everything we have seen with decentralization of data will now happen with assets."

With blockchain, data is split up and distributed in pieces, all over the internet. However, only one person is able to put the data back together–the owner. The control of the asset stays with the owner of the asset and all is done without third party intermediaries.

"Think of anything valuable you have – your car, house, jewelry, etc. These assets are not digital, but blockchain allows you to create a digital asset that represents that physical asset," says Epstein.

"With blockchain, everyone is able to clearly see who the owner of the asset is, but only the person with the right key can unlock the door of that asset.

Think about the title of the asset – it would be in your control. This is why people buy title insurance. Blockchain lets us buy and sell any asset without an intermediary. Additionally, the asset is programmable, so you can set up business rules and computational logic for each asset. For instance, you could put in place a rule that states, 'I can't sell this without others signing off.' Thus, the asset cannot be not sold unless business rules are met."

According to Harvard research, Blockchain also maximizes transparency and anonymity. Each transaction is seen by anyone who has access to the chain; however, since each node (or user) has a unique alphanumeric identifier, each user has the ability to decide whether to remain anonymous in the transaction between addresses. These transactions can also be programmed with algorithms that can automate transactions between users.

Why Blockchain Hasn't Caught On Yet

Trust Issues. Epstein emphasized the issue of believability and gaining trust of users. He said, "How will people get their head around this technology? Is it possible for individuals and companies to believe that they are safer having your money in their phone or computer instead of a bank?" Building this trust and credibility will take time.

Stigma. Harvard found that some industries may view blockchain as "disruptive" because it "can attach a traditional business model with a lower-cost solution and overtake incumbent firms quickly." However, they argue that blockchain is most importantly a foundational technology that can be used to create new business models and underpin business, economic, and social infrastructure.

Novelty. It will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady. Esptein agrees, saying that, "it is still very, very early. Think Internet circa 1993."

Adoption. Epstein shares that the financial services market has implemented blockchain technology most. They're looking to improve efficiencies with cross-border transactions. Bitcoin is the most well-known blockchain application.

Essentially, "Email is to the internet the way bitcoin is to blockchain. There are multiple apps, just like there are multiple blockchains," says Epstein.

Blockchain is still in its early stages, and new cryptotechnology applications and advancements are regularly occurring. We expect big changes over the next few years, as over $1 billion has been invested into this tech by venture capitalists.

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The Future of Wealth Technology (WealthTech)

Global High-Net-Worth Individual (HNWI) wealth has increased over the last decade. The rate is expected to grow at an average annual rate of 7.7%. This will be accompanied by rising operational costs as a result of stringent regulation and maintenance of technology infrastructure. As a consequence of this growth, there has been an emergence of new avenues and trends in wealth technology. Most firms aim at increasing their top lines. Almost every wealth and asset management firm is struggling to achieve excellence in areas of client experience as well as regular management of transformational change.

What Is the Future of Wealth Technology?

The use of predictive analytics has been applied to get additional insights into client behaviour and improve firms delivery to their added products and services. It involves extracting information from existing data to determine and show future trends. Models are, therefore, generated to predict future events and behaviours in wealth technology. According to the recent research by Aberdeen Group’s Predictive Analytics in Financial Services, the analysis found that asset management firms with predictive analytics achieved an average 11% increase in the number of customers in the past twelve months. Advisers can apply the use of predictive technology to anticipate the client’s needs and then offer additional products and services.

The Adoption of Cloud Computing Platforms in Wealth Technology

Cloud computing has also become a significant trend in wealth technology. There have been increased compliance requirements which include the Dodd-Frank Act, sectors in Financial Instruments Directive (MiFID), and the Sarbanes-Oxley Act (SOX), asset management. The conditions make companies gear towards cloud computing to lower the upfront capital expenditure and enhance sustainable growth.

Cloud-based derivatives post trade processing services helps wealth managers to effectively and efficiently maintain compliance. This aligns with the changing global regulatory environment. Cloud-based derivatives also lead to market end-to-end post-trade services. It offers services in asset classes for investment banks and asset management companies. Cloud computing platforms also result in an increase in productivity of client advisers. Wealth management firms integrate mobile as a key for their customers for valuable service provision and engagement on a personal level. According to research by CEB Tower Group, financial firms will increase their cloud computing budget. The growth in cloud computing budgets will enable them to sustain the changing trends in wealth management. Cloud services help capital markets and financial sectors to save almost 30 percent of their information technology budget.

The Dawn of the Quantum Computing Age

Quantum computing represents the future of investment managers and the wealth management sectors to overcome financial research challenges. It involves the use of composite algorithms and systems that use physics and quantum phenomena as the solution to the most complex mathematical problems.

Most business models are too simple. Besides, the assumptions made from them being unrealistic, there is the need to analyse such complex systems using sophisticated mathematics. The need for multiple testing also portrays quantum computing as a more useful method. According to research conducted by Guggenheim’s Lopez de Prado and Peter Carr, the findings illustrated the potential of quantum computing that will enable asset directors and wealth management companies to solve such complex issues. The problems include putting money into a set of property over a time horizon that is divided into multiple steps. The manager or wealth management firm must, therefore, decide how much to invest in each asset at each level while taking into consideration the account transaction as well as the market-impact costs.

More Focus on Social Impact

Focus on social impact is also becoming an emerging trend in wealth technology according a survey conducted by Capgemini and RBC Wealth Management. 92% of increased net worth personnel think that driving global impact is crucial in wealth management. Global impact is, therefore, a significant and important component in asset management. The growing popularity of multi-channel service delivery and the increasing digital innovation serve as drivers for this trend. It also encompasses the emergence of disruptive business standards.

It is thus crucial for firms to develop optimal strategies that influence digital technologies and social media to confront customer preferences. Though digitisation and the rise of social media are changing existing wealth management business models, new models are being developed. The future business survival will highly depend on the younger generation of wealth management firms’ customers. Nurturing and maintaining stronger relationships with them is thus important. Asset management companies need to address challenges in wealth management. Some of the challenges include increasing digitisation and engaging in more disruptive business models. They need to focus on available opportunities and not those of the 20th Century. This will help create wealth for the younger generation without alienating their clients nearing the retirement age.

The opportunities presented by the emerging technologies is important for wealth management firms. They can retain their customers which create wealth for the present and their future generations. The use of digital intelligence helps to gain customer insights. Increasing the client’s insight will be achieved by giving the right services a key focus in the different areas for wealth management firms in future years.

Rise of Automated Advisers

The increase of automated robo-advisers has also become an emerging trend in wealth technology. The robo-adviser industry is growing, with various companies already managing more than $2 billion dollars in property. Useful investment software allows robo-advisers to offer clients with low account minimums. It also includes the customisation collection builds, and completely automated financial management points. Re-balancing for less skilled and experienced investors will also be great news. Among the largest growing US-based robot adviser services is Wealthfront, they provide an investment management with prices that are affordable for wealth management firms. In fact, they require a minimum of $500 per year.

For instance, Invest.com is another leading start-up robo-adviser platforms. It specialises in access investments, making them available to anyone for the first time. The wealth management sector has been the first position in utilising appropriate technologies to promote client experience. Looking at the continuing rise of robo-advisers, financial advisers can make intelligent decisions. The development rate of all the assets under the management of advisory firms is expected to increase by 68% before 2020. Though robo-advisers are becoming popular, simulation technology is still used. It is mostly the case where robo-advisers fall short. Most firms prefer them due to their lower fees and their ease of use.

The Use of Blockchain Technology in WealthTech

Blockchain technology is changing the face of wealth management. This commonly decentralised distributed ledger technology is under research & development by most investment companies and property management companies around the world. According to research by Roubini ThoughtLab, it has found that 225 out of the 500 wealth management managers it surveyed had incorporated the technology in some way. This is by allowing the transactions to be verified electronically over an established network of computers. A Santander report published in 2015 shows that banks and property management companies could save up to $20bn a year by late 2022. The result will be achieved through using Blockchain technology in asset management. The report shows that adoption of Blockchain techniques in the asset management sector is highly inevitable. Furthermore, blockchain technology will create multiple new classes of assets.

Adopting Artificial intelligence in Asset Management

Wealth management firms use artificial intelligence and data mining mechanism to invest in a better way, evaluate the wealth market, and gather customer specific behaviour. AI is also used to instantly identify available opportunities that deliver appropriate and relevant services or products to clients. Due to the rapid growth of such technological advances, arises the establishment of better crime detection mechanisms, automated chatbots, compliance handlers, and more.

With the incorporation of artificial intelligence and asset management, especially for firms which are highly investing in cyber-security, companies could analyse the amount of sensitive data. AI systems could be optimised across multiple data centres and servers to ensure high-level blockchain security and crime detection measures. The wealth management companies are becoming increasingly alert to the risk of cyber crimes. The potential downfalls due to such threats make most large entities apply artificial intelligent services to identify and evade risks happening out of transactions made over the digital dimension. Most asset management sectors incorporate artificial intelligence into their research & development. In wealth management, decisions form a crucial part. Artificial intelligence could thus help managers make effective decisions for their clients by automatically research troves of data in collaboration with quantum computing and providing the best results each time.

A Further Look into Future Technologies in the Wealth Management Sector

Technology is continuously acting as an amplifier for the continuous growth of the wealth management sector. According to a recent Capgemini report entitled: Self-Service in Wealth Management, there is a high demand for digital services. Wealth management firms and financial institutions are thus in the process of developing an environment that is conducive towards the development of self-services for their clients.

Software automation has been emphasised in the asset management. According to an article entitled Balazs Fejes, SVP and Global Head of Financial Services at EPAM the benefits of using digital technology and software automation in the wealth management sector includes the increased satisfaction of clients and user experience. According to recent independent research from Forrester, investors constantly check their investment account balances online more often than on a paper statement. It portrays the need for software automation in the wealth and asset management sector.

Software automation and the use of innovative technologies in wealth management will in a great way help advisers with useful audibility and increase traceability, thus provide reductions in liabilities.  https://youtu.be/3lxf37kRWHU

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Kiwi Fruit, Chat Bots, and Marriage

Kiwi Fruit, Chat Bots, and Marriage


Who in their right mind would marry a Kiwi Fruit or a Minion?

Who in their right mind would want to have a conversation with a Minion… or a Kiwi Fruit?

Nobody would, right?

So why would anyone want to talk to a Chat-bot?

Can somebody explain why and how, in what is supposed to be the 21st Century, this article cites research which says that the large majority of millennials either enjoy chatting with chat-bots or would like to do so?

How stupid!

Am I 'Old School' or obsolete because I prefer to talk to real people?

This reminds me of those articles I've read about people who fall in love with doll companions or robots. To some degree it also reminds my of the idea of marketing with automated webinars (although that might have its proper purpose in certain situations).

My point is that I see something similar happening in "modern" MLM today.

It's gotten so hi-tech that it's being drained of humanity. There isn't enough human-to-human contact…. especially ON the internet side of it. 

People (and companies) have discovered they can get recruiting and selling leverage with technology and they've ramped it up soooo much that there is almost no humanity left it the process.

They think they can substitute technology completely for human contact. They reason that if it takes them X amount of time to personally recruit and mentor 2 people, maybe they could recruit and mentor 4 people in the same amount of time if they automated all or part of the process.

Then they go on and think that if they can use technology to recruit and train 4 people, why not try to find better technology that will allow them to recruit and sell even more by doing completely away with personal relationships transparency, or accountability of any kind. 

That's the way the world is going and MLM is following right along in parrallel. And yet people wonder why there's an employment problem. It's a version of, "Where's The Beef!?" Now it's, "Where's The People!?"

Another factor in the equation is, of course, the fact that many people today, especially Millenials, don't communicate very well verbally, i.e. without all the trendy filler-jargon like, "like"…"totally!"…"awesome"…"cool"…"yeah man", etc.

I wonder what the Gettysburg Address would have been like if the only tools and skills Abraham Lincoln had was a Blackberry and Twitter. 

I actually think an MLM which stipulated that leaders could not recruit a few people 'wide' until they had enabled (with proper mentorship) a certain number of their recruits to go deep…I think it would ultimately result in much stronger teams and steadier growth.

Putting real communication back into MLM, and especially internet marketing, should be a higher priority for leaders.

In my opinion, two of the reasons there are so many 'crash and burn' situations in MLM and internet marketing today is because (a) people don't know how to properly vet a product or opportunity, and (b) so many products and opportunities are mostly (if not entirely hype).

The virtual reality of the internet has become our new 'Matrix' but there is little real substance and/or accountability. Much of what we see, and even our relationships, on the internet, is based on hype, facade, and 'act as if' bullshit. "New" is interpretted to mean, "good" or "effective". Unverified testimonials are interpreted as guaranteed future results.

That's why I want to communicate with or develop a relationship with somebody on the internet, the very first question I usually type is, "Can you talk on Skype?"

Anyway… that's my rant. I couldn't believe it when I read that article above. I just find it incredible that human beings are getting so enamored with robots! Maybe someday you'll be able to go into a Walmart, buy a robotic 'companion' of your dreams, get legally certified as married at the check-out counter (which will be robotic too, of course), and walk out of the store happily married. 

Leonardo DaVinci, James Watt, Issac Newton, and Henry Ford would be so amazed at how far we've come.


Art Williams
Freelance Copywriter
eMail Contact

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