Category: Blockchain

2023 Gartner Emerging Technologies and Trends Impact Radar

Gartner has released its 2023 Gartner Emerging Technologies and Trends Impact Radar. Let me try to give it a read with the eyes of a wealth
or asset manager.

Artificial Intelligence is all over the radar, with Foundation Models, Self-Supervised Learning, Generative AI, and more. Wealth and asset managers must seriously look into Artificial Intelligence and understand how it can be leveraged across their value chain, from investments to operations, risk management, and compliance. Part of the solution will come from their solution providers, like Bloomberg, BlackRock Aladdin, or State Street Alpha, to name a few providers. But wealth and asset managers cannot only rely on their providers. Instead, they must acquire the necessary skills and talent and play with artificial intelligence technologies. War for talent will make it complicated.

Blockchain is also quite present with Web3 and Tokenization, both being in the 3-6-year horizon. Most wealth and asset managers are already testing tokenization in one way or another, and they should continue. Tokenization will have many benefits for the industry, from speeding up transactions, eliminating some intermediaries and therefore reducing costs, making some asset classes available to smaller investors, improving the liquidity of some assets, and more. Tokenization will require some industry alignment and standards.

No surprise, Digital Twins are here too. Gartner is probably thinking more about Digital Twins in the context of manufacturing and industrial activities. But as discussed in this blog, the potential for digital twins in the financial industry is real and massive.

Then, there are hardware and infrastructure with Neuromorphic Computing, 6G, and Hyperscale Edge Computing. If wealth and asset managers continue to move to the cloud, they’ll be able to leverage these latest hardware technologies as they become available in the cloud.

Who will pick up the bill when your smart contract is buggy and everything is lost?

I always thought people underestimated the challenge of blockchain and smart contracts. While smart contracts have many benefits, like information security, no third-party required to verify authenticity, efficiency in execution, and much more, smart contracts can be complicated code, buggy, and lead to disasters. Chasing bugs on the blockchain (MIT Technology Review) provides examples of such disasters, where tens of millions of dollars have been lost and cannot be recovered.

That opens the door to a new business opportunity that will attract many players over the coming years: auditing blockchains and the code of smart contracts. Not making them bulletproof and guaranteeing that there will be no bugs, but ensuring the code is robust and that smart contracts will behave as expected. Challenge: finding the right talents to staff these “audit teams” with top-notch engineers who can make a difference.

I am not saying you should not push blockchain and smart contracts. But make sure you have an experienced team building them, and consider having a second pair of eyes looking at the code. Because once they are out there, it might be too late to make any changes and avoid a disaster. It will often be too late when you know about the tragedy.