Asset managers wary to collaborate on DLT

Collaboration over distributed ledger technology amongst has yet to take off asset managers

By Paul Walsh

Asset managers have yet to engage with one another over the development of distributed ledger technology (DLT), with some fearing it could threaten their business offerings.

Speaking at the Global Custody Forum in London, Sonia Maloney, chief operating officer at Norrep Capital Management, suggested that asset managers were not experiencing the benefits of DLT because of a lack of cooperation.

“The piece that is missing in DLT is around collaboration, where we are in the asset management space there is a lot more that could be done for end-to-end digitalisation,” said Maloney.

“I know there is a lot of consortiums going on but as an asset manager you don’t see a lot of engagement across the different chains of the service providers.

“I think that this really needs to change.”

Blockchain technology has been hailed by industry participants as being the future of the industry, with the potential to streamline processes such as settlement, clearing and corporate actions.

Fellow panellist Chris Sier, co-led at FiNexus concurred that greater consensus was needed but suggested that the nature of the industry would make such consensus difficult. 

“If we call DLT by its proper name, it is distributed consensus ledger technology and in my experience there isn’t this consensus in the short-term,” said Sier.

“DLT require consensus and that is why not a great deal has changed as none of us want to agree on any standards and everybody wants to have a differentiating platform.

“Everybody sells themselves as having something unique and if somebody takes away that uniqueness you’ve got nothing to sell.”

The panellists’ comments come in the wake of high profile departures from blockchain working group R3.

Last week, R3 founding member Goldman Sachs confirmed that it was not renewing its membership with the venture as it no longer aligned with the bank’s technology strategy. 

Santander also confirmed that it too was leaving the project but would continue to concentrate on its other blockchain initiatives.

Reports from the Wall Street Journal also suggest that Morgan Stanley has left the group.