The icy winds of crypto winter have not put a damper on Schroders CEO Peter Harrison's enthusiasm for blockchain technology, which he believes will be "hugely disruptive" to the financial ecosystem over the next five to 10 years.
Speaking to the press Oct. 24, Harrison said that he believed the asset management industry was "obviously on the cusp of another major change," in regards to the advent of blockchain technology, which he compared to the beginning of the internet.
"The advent of blockchain will allow us to organize our assets in an entirely different way," Harrison said. "We will hold everything in our digital wallets at some point in the future."
Under Harrison's leadership, the London-based asset management firm — which had £724.3 billion ($885.1 billion) in assets under management as of Sept. 30 — made its foray into cryptocurrency last year with a strategic investment in Forteus, a crypto asset manager.
This year, Schroders has dug even deeper into crypto: In June, the firm announced a partnership with Singapore's top financial regulator to develop a digital asset ecosystem and test the feasibility of tokenized assets, including the "tokenized investment vehicles" the firm has been developing with global funds network Calastone.
Harrison's crypto convictions stem from his belief that the ongoing generational wealth shift will change the way investors interact with the industry.
"If you've got a digital wallet today, you probably think 'What on earth do I do with it?' It feels a little like having an AOL account in 1993 — you can send a picture of a cat to your mother but you didn't know what the internet was for," Harrison joked. With blockchain technology, he said, investors can "consolidate all your assets, all your insurances, all your banking, all in one place — and that new generation of wealth owners will think about it entirely differently, and that will be very disruptive to the ecosystem."
Blockchain's potential, Harrison added, will only be boosted by the rapidly expanding capabilities of artificial intelligence.
"Now, imagine what happens when you combine AI with blockchain into an entirely new ecosystem," Harrison said. "Your ability to tailor down to the individual and mass personalization goes up hugely. And all of this will be happening within a five- to 10-year period. People spend a lot of time debating passive and active but I think there are some bigger things shaping our world."
Harrison acknowledged that the regulatory environment in the U.S. was challenging for companies hoping to experiment with cryptocurreny, which drove Schroders to establish its blockchain team in Singapore.
"We actually put our (blockchain) team in Singapore because they could sit with the Singapore regulator, with a whiteboard, for two hours, and actually try to design what the new ecosystem looks like," Harrison said. "You need to think about when things like SWIFT were created — a group of people came together and said, 'what's the iOS system that the world is gonna operate on — so, for me, that's going to come from Singapore where the government is supporting that. And what you're seeing is other regulators falling in line."
