Synechron 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 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.
Asset tokenization to open investor opportunities
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
“People excluded because of lack of size can buy into non-traditional assets,” Coates noted.
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.
Client onboarding taps OCR, NLP, RPA
Synechron, meanwhile, taps optical character recognition (OCR), natural language processing (NLP) and robotic process automation (RPA) to ease the client onboarding process. In this aspect of the company’s wealth management tech accelerator, OCR and NLP are used to scan a new customer’s ID and extract the relevant data. An RPA-created workflow then automatically populates the wealth manager’s client onboarding forms with the data, noted Diana Kearns-Manolatos, global head of marketing at Synechron.
This accelerator, which uses technologies including OpenNLP, focuses on both account onboarding and know your customer (KYC) requirements. The idea behind this accelerator is to help financial institutions collect KYC and due diligence information without making the process overly cumbersome, according to Synechron.
Diana Kearns-Manolatos
Indeed, a wealth manager’s digital customer acquisition process is especially important since it has the dual purpose of collecting important customer data and improving the customer experience, Kearns-Manolatos said.
“It is really the first impression for a new customer,” she said.