Capital markets News

DLT, digital assets not high priority for Swiss asset managers, except for banks

swiss asset managers funds

A Swiss survey found asset managers don’t rank digital assets or DLT as a major opportunity, except for banks. The results are from a 2023 industry report published by Switzerland’s Asset Management Association on Monday.

Bank-owned asset managers rate digital assets twice as highly as the average. And they consider blockchain’s potential as three times higher than the mean.

Swiss asset managers and DLT

The survey provided ten opportunity areas for fund managers, including sustainable investments, specialization and private market investments, which all scored highly. Digital assets came ninth out of ten options. The lowest ranking was passive investments.

However, when they segmented the results by ownership, bank-owned asset managers gave the digital asset opportunity a score of six out of ten compared to independents, which rated it as a three.

Turning to the impact of technology over the next ten years, 70% ranked machine learning as number one, compared to 7% for blockchain/DLT. After segmenting the results, it showed that insurer-owned asset managers didn’t rate blockchain at all, whereas 20% of bank-owned asset managers said DLT would be the most impactful.

Global interest in fund tokenization

As context, these results come as interest in DLT from asset managers worldwide is on the rise. Last year, the UK’s Investment Association asked the government and FCA to create a framework for fund tokenization, and the Treasury has convened a working group. In the meantime, the UK’s Abrdn has started tokenizing some funds.

Switzerland is one of the most advanced economies in the world regarding regulatory support of digital assets and blockchain. The SIX Digital Exchange (SDX) was the first regulated exchange and CSD operated by a stock exchange.

And UBS has been at the forefront of blockchain adoption. It was one of the main drivers behind the Utility Settlement Coin, which morphed into Fnality, the UK-based financial market infrastructure. UBS also issued the largest natively digital bond to date. In January, its chairman said that blockchain was unstoppable, but it “dodged a bullet” with crypto.