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EY: Blockchain innovation in wealth and asset management

Monday, April 10, 2017   (0 Comments)
Posted by: CalALTs
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Benefits and key challenges to adopting this technology

Blockchain, the underlying technology of bitcoin, is drawing significant focus and investments from many financial institutions in the industry. Given the technology’s potential to both disrupt and enhance processes and systems, many firms have recently dedicated resources to understand and integrate blockchain into their businesses. This article will discuss how wealth and asset management firms are seeking out opportunities to harness the benefits of blockchain as well as key challenges to adopting this technology. Further, the article will highlight near-term practical applications for blockchain and how to approach blockchain innovation

What is a blockchain? 
A blockchain is a shared record of all transactions and related information for a particular entity. This shared record — a distributed ledger or database — is visible by all parties with permission to the record. A blockchain comprises an ever-increasing set of transaction data blocks (see diagram below) that are verified by members of the network, traditionally referred to as “miners.” Each block is a set of transactions between two or more parties (e.g., counterparty A pays counterparty B in exchange for an asset) and added to the existing chain of blocks, creating a complete history of transactions. With each additional block, the entire distributed ledger is synchronized and agreed upon by all participant nodes. All nodes are continuously validating the transaction history, resulting in a blockchain of immutable data. 


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