Blockchain drastically simplifies working with such a complex product, which only several investment banks previously dealt with. Regulation and increasing investor attention to commission costs have significantly weakened the competitive position of structured financial products in comparison with exchange-traded funds (ETF), however, the use of blockchain will change this situation.
- Lower level of fees and a greater level of safety. Sales of structured products have declined steadily over recent years, in part as a result of regulatory changes. Blockchain will make structured products cheaper, faster, safer and more transparent by breathing new life into trillion-dollar structured products markets.
- Lessen settlement risk and mediators. Blockchain technology will minimize settlement risk,the chance of human faults and number of different mediators between investors and revenue from structured products.
The most reliable banks in Europe such as Vontobel and Lienhardt & Partner Privatbank Zürich have already issued structured products using all benefits of blockchain implementation. The Forbes journal has claimed, the mass introduction of blockchain technology will occur in an interval of 4-7 years.
The Benefits at a Glance
- Transparency
- Reduced costs
- Potential absence of mediators
- Lower chance of human error
- Minimised settlement risk
