A new survey has found that nearly two-thirds (64%) of asset managers expect to using blockchain technology within the next five years.

Conducted by consultancy Roubini ThoughtLab, the findings are part of a report entitled "Wealth and Asset Management 2021", a broad research offering that aimed to study how investment providers are embracing new technologies.

When asked about technology-enabled investment tools, 39% indicated that they expect blockchain will form a part of next-generation digital wealth management platforms, though it was not the fastest-growing technology among those surveyed.

Over the next five years, respondents expected artificial intelligence and virtual reality use to grow the fastest followed by web analytics and sentiment analysis.

Notably, 45% of respondents are targeting blockchain in the short-term, indicating that they expect the technology to become a bigger part of their business by 2021.

Bank of Montreal, Broadridge, CFA Institute, Cisco, eToro, Schroders, SEI and State Street also contributed to the report.

Investment analysis image via Shutterstock

asset managementBankingFinance

Microsoft unveiled a new version of its consortium blockchain software offering at ethereum's annual developer conference in Shanghai today.

Released as part of the update is its first "Quickstart Template", a tool designed to make it easier for Project Bletchley users to spin up a consortium using a private version of the ethereum blockchain. The template, Microsoft representative said, is likely to be the first of many that automate the process using different blockchain projects.

But while the latest advancements to Bletchley may not sound like an overhaul, Microsoft Azure's blockchain program manager said the update offers a glimpse of what will come as the project adds additional members.

Gray told CoinDesk:

"It's like a three-week process boiled down to eight questions."

Gray explained that users are taken through a step-by-step process whereby they select the members of the consortium, determine the number of nodes each bank will have on the network and then geographically distribute those nodes using the Azure cloud to boost resilience.

The released co-incided with the launch of a new white paper that delves deeper into Microsoft’s "cryplets" offering, a form of oracle that uses an outside data source to inform a smart contract.

Gray said that by using cryplets, financial institutions could, for example, inform a smart contract’s execution with the current LIBOR rate. However, Gray added that he sees cryplets as providing more functionality, allowing users that don’t want to share sensitive business information a way to store it off of a blockchain.

"If you have Blackrock going into a smart contract agreement with Citi, they don't want to put their IP on the blockchain. It has access to Azure, the cryplet itself will sign transaction, and you’ll have verification that the data is authenticated," he continued.

Middleware roadmap

In interview, Gray explained that the releases form the beginning of what he called a "middleware roadmap" that aims to explain how cryptlets work and what they can be used to create.

Should all go according to plan, Gray said he envisions the templates and cryplets as a way to engage the open-source blockchain community.

At next year's Devcon, he said he hopes developers will attend to discuss speciality cryplet libraries.

"That is coming, we’re building that today," he added.

Enterprise institutions, he foresees, would then be able to subscribe to cryplet data services that would provide data services that would charge money in exchange for a subscription to a certain number of calls.

"You get trusted data in a dependable way because it runs in the fabric, you get resilience, we have guarantees about uptime," he continued.

Ethereum infrastructure

Gray indicated that the project is the latest sign that Microsoft remains interesting in developing ethereum as an "infrastructure layer" for enterprise blockchain services.

While Gray acknowledged the project has to do more to prove experimental elements like proof-of-stake payment verification and sharding, he said Microsoft intends to support this effort.

Overall, Gray said he sees the public ethereum blockchain as a key component of its vision, as evidenced by its plan to enable a collaborative environment on Azure. He noted that access to quality developers remains an issue for enterprise industries, and that by fueling efforts with resources from ethereum's developer pool, more progress could be made.

"We want to contribute to help them achieve that, but we’re providing higher level services," he explained.

He added that Microsoft will also require the participation and interest of ethereum's community as well should it want efforts like Bletchley to succeed, concluding:

"We need them to work with the community to improve public ethereum performance, to nudge them into enterprise."

Images via Pete Rizzo for CoinDesk. 

Devcon2EthereumMicrosoft

State Street is working on a new blockchain project aimed at cataloging transactions tied to investment assets.

The Boston-based investment services firm is partnering with California-based blockchain startup PeerNova on the project. The prototype being developed will track funds used in investment transactions.

The firm suggested in statements that the trial could ultimately lead to a future product line focused on the tracking of assets using the technology.

Hu Liang, senior vice president for State Street’s Emerging Technology Center, said of the project:

"Together, we are developing technology that is designed to track the lineage of capital with precision and verifiability. While currently a trial, the potential to provide that level of detail more efficiently and more effectively can bring meaningful value to our clients."

The announcement marks State Street’s most notable initiative related to blockchain to date.

The bank is one of several dozen institutions working as part of the R3 distributed ledger consortium, and was one of the first banks to join the effort last year. Last November, State Street moved to highlight the blockchain experience of its new chief information officer.

State Street did not immediately respond to a request for comment.

Image via Wikimedia

PeerNovaState Street

Microsoft wasn't the only financial firm to voice its interest in ethereum today.

At the software project’s annual developer conference, Devcon2, Thomson Reuters research scientist Dr Tim Nugent revealed a number of early-stage projects that the media giant is building on the decentralized application development platform.

At the day's final morning session, Nugent spoke broadly about the company’s projects (including its work with the R3CEV banking consortium and the Hyperledger blockchain project), while offering new details about how it sees the technology fitting into its existing product lines.

However, Nugent explained that while Thomson Reuters is working on private consortium efforts, most of its internal demos have been built so far with ethereum.

Nugent told the audience:

"We spend most of our time working with ethereum demos and building proofs-of-concept with ethereum."

The presentation was the latest indication that the New York company is interested in applications of blockchain technology, following public statements earlier this year.

Nugent also highlighted Thomson Reuters work to promote its blockchain efforts through hackathons held in partnership with the Ethereum Foundation, indicating these events help it better test its solutions with the open-source community.

Thomson Reuters, he said, remains committed to continuing its work on such programs, and that it will hold its next ethereum developer conference in January.

Customer identity

Nugent said that while Thomson Reuters is primarily known as a news service, it has four other verticals it believes blockchain would better apply to, including its financial and risk; legal; tax and accounting; and intellectual property and science offerings.

"Many of our products and services are proprietary databases and solutions, and there is a question of entitlement, [of] who should have access to these databases," Nugent said.

One use case Nugent said is particularly suited to blockchain is licensing agreements, and he gave an overview for what he called "BlockOne ID" an ethereum-based distributed application that could provide identity services.

"This is already an area where we have compliance products and we want to make these available on-chain," he continued.

Eventually, Nugent said such a service could be integrated into its KYC offerings, including its compliance records checking software.

Data delivery

Given its role in providing trusted data delivery, Nugent said he sees Reuters also playing a role in the creation of oracles, or blockchain-based tools that could be queried by smart contracts.

The idea that has also caught the attention of Microsoft, forming a key part of its early morning keynote.

"You might deploy a smart financial instrument, and you would make a request that would talk to our oracle," he said, indicating that it could, as an example, call the price of a financial asset tracked by its data tools.

For such applications, Nugent said that Reuters is examining other innovations in the blockchain industry, including those related to privacy, which he said would be integral for his company to deploy applications on a public blockchain.

Though interested in such developments, Nugent stressed that all the demonstrations remain in early stages.

He concluded:

"That's all very much under test."

Image via Pete Rizzo for CoinDesk

IdentityRegulationThomson Reuters

The Bank of England has been one of the more aggressive central banks to investigate blockchain and distributed ledger technology, but at least one of its officials doesn’t believe widespread adoption will happen anytime soon.

Andrew Hauser, the central bank’s executive director for banking, payments and financial resilience, made the remarks during a speech on the history of how the Bank of England developed its settlement systems over the past 20 years. His speech took place at the CREST Twentieth Anniversary Conference on 20th September, an event commemorating the launch of the UK-based securities depository.

His comments come after the Bank of England released a consultation paper on the development of its next-generation settlement service and the role in which the technology might play. The Bank of England has spent months investigating the prospects of a central bank-issued digital currency, and recently formed a fintech accelerator aimed at supporting that and similar initiatives.

Hauser remarked that financial technology more broadly would shape the way the central bank develops new systems, going on to highlight distributed ledgers in particular. Yet he struck a conservative tone as to how quickly adoption would play out over the years to come.

Hauser told attendees:

"There is no likelihood of such an extreme revolution occurring any time soon: much more work is needed across a whole range of issues, including: speed and scaleability; confidentiality protections; developing common protocols; integrating cash and securities movements; and establishing regulatory and legal norms.”

More likely, he went on to say, are "less ambitious but still potentially transformational" uses in certain areas, particularly in cases where market infrastructure could use improvement.

Hauser also noted that financial institutions looking to work with the technology need to decide whether to pursue it alone or in group fashions, a reference to efforts such as the R3 distributed ledger consortium.

"But doing neither is a risky approach," he added.

Image via Shutterstock

Bank of EnglandCentral Bank

In spite of massive investment in financial technology, JPMorgan Chase still has a long way to go to meet its blockchain objectives.

Abhijit Gupta, multinational bank’s head of science and technology in the Asia Pacific, told Chinese news service Sina that he was concerned about the improvements in the technology, “especially speed,” according to a translation of the article.

Gupta added:

"Over the past year and a half, the processing time of our system [improved by] 10 times, but in fact we need to achieve is 1,000 times. "

The details come months after the bank first began disclosing its blockchain work. In February, JPMorgan conducted an internal test moving money between London and Tokyo as part of a trial involving 2,200 of its clients, according to a Wall Street Journal report.

A month later JPMorgan unveiled its work on Juno, a distributed ledger project published as part of its involvement with the Linux Foundation-led Hyperledger initiative.

If JPMorgan still has a ways to go before meeting its blockchain objectives, reports show the bank is financially committed to the course, along with another area of technology.

In December of last year, Business Insider reported on an internal memo from JP Morgan that revealed the bank would invest $9b in blockchain and robotics technology through the end of this year.

Speaking to Sina, Gupta provided insight into how the company views the two areas of investment, specifically as relates to concerns over their impact on employment.

"We do not believe financial technology makes a lot of people unemployed. As more money [moves] into this area, more job opportunities will come up," he said.

Gupta concluded:

"For example, in the application of robotics banking operations by reducing human error and improve efficiency, will improve the customer experience. We therefore can re-deploy staff to the department that they can continue to generate value."

Image via Shutterstock

Asia PacificJPMorgan ChaseJuno