High-net-worth individuals (HNWIs), or those with more than $1 million available to invest, have combined assets of more than $63 trillion worldwide, according to business consulting firm Capgemini. But it appears HNWIs aren’t investing in cryptocurrencies as often as you might think.
The latest estimates suggest that despite trillions available, only $50 billion has been put into cryptocurrency assets.
Today, Bankorus — the fintech company that created China’s first robo-advisor — has announced the launch of its cryptocurrency wealth management solution.
Wealthy individuals who are interested in investing in cryptocurrency face a number of challenges. First, HNWIs are accustomed to entrusting their wealth to financial institutions that may use outdated, centralized systems. These investors also encounter a range of problems when attempting to invest in cryptocurrencies, including lack of access, persistent data-breach risks, a costly high-touch process, high compliance costs, and inconsistent reporting standards.
These kinds of issues are largely responsible for the lack of mainstream adoption, but Bankorus believes that will change.
“According to a World Economic Forum survey, by 2025, at least 10 percent of the total wealth of HNWIs will be dispersed into crypto assets,” Bankorus CEO and cofounder Greg Van Den Bergh told me. “With our platform (based on years of hands-on experience with the wealth management industry), we believe this pace will be accelerated. In the next five years, we estimate 10 percent of the total wealth of HNWIs will convert into crypto, and in next 10 years, 25 percent of the total wealth of HNWIs will convert into crypto.”
Bankorus lets its users diversify their portfolio of assets, convert traditional wealth into digital assets, facilitate cryptocurrency loans, and trade digital assets globally. Underpinning the system is, of course, blockchain technology, which in this case allows Bankorus to purchase digital assets on behalf of its investors, while maintaining full compliance. The Bankorus protocol is an open source API built on the NEM blockchain, which allows for the integration of smart contracts.
Bankorus will use three AI-based algorithms to help investors make better-informed investment decisions — a financial planning engine, currently in use by 3,000 participants in China; a portfolio engine that allows investors to create their desired portfolio; and a risk management engine that calculates risks in real time using data stored on the blockchain.
The risk management engine and financial planning engine work together to build a portfolio that reflects users’ predictions.
Founded in 2013 in Beijing, and formerly known as MiCai, the company currently manages assets worth $30 billion, with over 200,000 of the world’s most wealthy clients across China, the U.S., and Europe. It also has partnerships with global consulting firms such as Roland Berger, Bain, and Microsoft. The Bankorus board of advisors includes several experts on wealth management and blockchain, including Charles-Edouard Bouée, CEO of global consulting firm Roland Berger; Chris Van Aeken, former CEO of Morgan Stanley Private Bank; and Lon Wong, president of the NEM Foundation.
So, how has the Chinese ban on ICOs and related startups affected Bankorus?
“Our understanding is that the policy is mainly in place to ban scammers and protect investors, as well as to manage potential financial risks or crises that might occur due to bad ICOs, not affecting the positive effects of blockchain technology or the serious companies that are correctly applying blockchain to solve real-world problems. Bankorus is heavily integrated into the finance industry — a heavily regulated industry — and has all necessary licenses to carry out its crypto wealth management business globally. Bankorus complies with local regulations and laws in order to fully operate.”
What’s next for Bankorus?
“Bankorus aims to be the world’s number one crypto wealth management platform for HNWI clients, the leading crypto assets marketplace, and the top lending marketplace for collateralized crypto assets,” Van Den Bergh said. “There is a lot of exciting news in the pipeline for 2018 and beyond to utilize blockchain technology to create a better solution to wealth management.”
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