Peter M. Brady’s Post

Transcript

With digital assets being part of the mainstream, is tokenization on the blockchain the next big disruptor to the financial services system? Hello, and a warm welcome to Financial Services Fast Fives. Today, we're going to give you 5 things you need to think about from a digital assets perspective. And I'm really thrilled to have Jay Schulman, who leads RSMS Digital Asset Practice to provide some really good insight into the topic. So Jay, welcome to the show. Thank you. Great to be here. Fantastic. Now let's get right into the questions, Jay. So #1 what do you think the future is for digital assets over the next, say, three to five years? I think we're very focused on thinking about Bitcoin and Etherium, and certainly that's part of the future, but where I'm focused is on the tokenization of real world assets. So that's the concept that we take something like a U.S. dollar, a bar of gold and put that on a blockchain to represent it so that you and I can move that back and forth really, really fast. Dollars and gold, that's interesting. But I think what we're going to see where the real disruption is going to come from is stocks and bonds and other types of equities and it is going to be very disruptive. Financial services and I think it's right in that three to five year timeline. So that to me sounds like the fractionalization of assets and a real change in the way we think about the whole of financial services. That's fascinating stuff. So Jay, next question. You know, as you lookout into this landscape, what are you seeing that perhaps other people aren't seeing? I think we've seen the ups and downs of the market. What I see every day is companies that are building all of the things that I just talked about and many other things constantly over the past couple of years. And one of the phenomenons that I think is really important to understand is it may take two to three years to go from an idea to a product in the market that we've been helping our clients with. And so you may look at what is here today and really what I'm looking at is what's going to come to market. In three years and there is just a tremendous amount of innovation, excitement and really interesting disruptive things coming to market in the blockchain and digital asset space. So that's what we need, more disruption in the market. But that's right. It certainly is exciting. It's also a little bit scary actually to be honest with you. Hey, third question. You know, there are lots of people that comment on the digital asset space and blockchain in general and tokenization and all of these things, but what do they get wrong? In your mind. I think we think about these transactions on a blockchain with digital assets as being very anonymous. But the reality is we know where every transaction has been. We have this really rich history. And So what if we combine that history with the customer and link those two pieces together? That's what a lot of financial service companies are working on today, is linking that so that you can see the transaction throughout time and you can actually link that to a customer. And I think that's going to be really powerful. For the future of financial services. So if I work in the in this space, let's say if I'm, you know. A big wig at a broker dealer, for instance, and we don't do anything in in digital assets. Well, what should I be doing to prepare even just to get smart on this? I, I think first is don't dismiss it. It's very easy to say, oh, this is going to go away or it's not affecting me. I think that you really have to go in and look at the fundamentals of how a blockchain works and the fundamentals of how these digital assets are being used and then think about how it's going to impact your business. And it, it is, I'll be honest with you, Peter, it's super easy to say, oh, this is never going to happen to me. But when you really look at the fundamentals here, I think there's a lot of excitement and we've seen some of the largest. Asset managers in the world now jump into this space. They're seeing it, which it becomes harder and harder by the day to deny. And so I'm not saying you have to go implement something or go jump on the bandwagon, but I do really think it's important to give it some critical thought here. Alright, so, So what I'm hearing, what I'm taking away from that is like get smart on this stuff, be prepared because you know, ultimately, as you said, it's it's going to be taking over the world at some point in the future. That's exactly right. That's smart. Yeah. So Jay, last question, we talked about a lot today, but what did we miss? What didn't we talk about? I think that that we spent and we're both in financial services. So it makes sense. We spent a lot of time talking about the financial services aspects of it. I think there's a trust aspect here of blockchain that's really interesting. We've seen the advent of AI deep fakes and everything that's going on. And there's a real use case here for determining if something is real or something is AI generated. And where it gets really interesting in financial services is the concept of know your customer and. We can, you know, validate whether an image is real or whether it's AI generated, but we can also validate whether I have gone through a formal know your customer process and to allow other companies to rely upon that. And so while I do look at it in the broader sense of trusting all different kinds of things, there is a financial services aspect here that I think is really interesting. And I imagine that a lot of the big banks and others in financial services who are looking at how you can take this trust element and actually. Make some of these friction processes a little bit more frictionless. Well, Jay, it's intriguing, it's exciting. I'm. I'm certainly gonna get smarter on it. Thank you very much for your contribution today. And listen, if you're watching and listening, thank you very much for that. If you like this, press the like button below. And if you have any thoughts or ideas for future topics, please feel free to write a comment below as well. Meantime, thanks very much and we'll see you all next time. Thanks.