Bringing you live news and features since 2006 

The era of non-bankable asset management starts now, says Avaloq’s latest industry report


Despite non-bankable assets (nBAs) accounting for around one third of global private wealth, they often come with high entry barriers for investors. However, this is forecast to change significantly over the next few years as innovative technologies and solutions allow financial institutions to value, hold and issue nBAs in the form of tokenised assets, alongside traditional ones such as stocks and bonds.

Concrete examples of non-bankable assets are direct investments in private companies, real estate or even pieces of art and rare collectibles such as luxury cars and high-value jewellery. Dealing with nBAs is often more complicated than with traditional assets, in part due to the intrinsic complexity of computing risks, pricing and forecasting returns. However, the size of the market – and the opportunity – is substantial: the market size for tokenised assets was estimated at USD18.1 billion in Q4 2020 and some experts predict it to be worth around USD24 trillion by 2027. More detailed insights on the rapidly growing nBA market can be found in Avaloq’s latest industry study (Non-Bankable Assets – Investing in a New Era).
Philippe Meyer, Head of Blockchain Solutions at Avaloq and co-author of the study, said: “Non-bankable assets represent a compelling investment opportunity and we believe they will increasingly form a part of portfolios for high net worth and affluent clients, before reaching retail investors as well, thus accelerating the democratisation of wealth management. Modern, continually evolving technologies will help to make the nBA market accessible to new client segments. First and foremost, this includes blockchain technology, which enables the tokenisation of nBAs and helps to create liquid markets for those assets.”
According to the study, three key challenges need to be overcome in order to scale the adoption of nBA investing:
Investors and advisers need to understand the risk and return of an nBA, including its current and future value
Investors need to be able to buy and sell nBAs flexibly and conveniently – liquidity and easy access is key for the broader adoption of nBA investing, where clear and practicable regulations will ensure trust and confidentiality
Lowering entry barriers like minimal investments will open up nBAs to larger groups of investors, such as the mass affluent segment
Critically, technologies and solutions are already available to help wealth managers and banks meet the growing demand for nBAs, including the valuation and management of tokenised assets. Such platforms, which are fundamental for cryptocurrencies and tokenised securities to be included in regular portfolios, offer core capabilities such as tools for safekeeping and digital wallet management, seamless integration into existing banking infrastructure, regulatory compliance, and connectivity to brokers and exchanges.
Dr Nils Bulling, Head of Digital Strategy and Innovation at Avaloq and co-author of the study, says: “Tokenising non-bankable assets provides a unique opportunity for financial institutions and wealth managers to expand their assets under management and advice offering. It is a growth strategy that promises an increase in asset volume at likely lower client acquisition costs, given that it can leverage an existing client base. In this new era, token-based business models are indeed paving the way for the democratisation of wealth management.”

Latest News

ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..
Investors urgently need greater access to diversified investment strategies aligned with the Paris Agreement on climate change if the world..

Related Articles

Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Ed Rosenberg, Texas Capital
Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by