Just as Uber revolutionized the transportation industry by challenging the traditional taxi model, tokenization promises to transform the financial sector, offering new opportunities for market participants who, until now, were beholden to traditional systems and operated under restrictions imposed by centralizing institutions such as banks and brokerage firms. These participants include investment funds, asset managers, investment advisory firms, securitization companies, and a small fraction of fintechs.
Especially in Brazil, funds often rely on large banks and brokerage firms for the distribution and administration of their financial products. Beyond the bureaucracy and slow processes that delay strategic decisions and hurt performance, this limits their capacity for innovation and imposes high costs, which are passed on to investors.
Asset managers also face challenges, as they must handle asset custody, fund administration, and regulatory compliance, often through intermediaries that impose fees and restrictions, limiting their flexibility and agility to explore other diversification opportunities.
Furthermore, increasing regulatory demands from bodies like the Comissão de Valores Mobiliários (CVM) in Brazil and the Securities and Exchange Commission (SEC) in the US necessitates constant updates and compliance, which can be costly and time-consuming. Moreover, the need to invest in new technologies, such as artificial intelligence, big dataIt is crucial for maintaining competitiveness, requiring not only high implementation costs but also training and retention of qualified talent.
Competition in the sector has also intensified with the increase in the number of asset managers and the ease of access to investment information and tools, making differentiation in the market a constant challenge. Simultaneously, investors are becoming increasingly informed and demanding, seeking sustainable and responsible investments in addition to financial returns, which compels asset managers to adapt their strategies and product offerings.
Another significant challenge is posed by historically low interest rates in many markets, making it difficult to achieve attractive returns on traditional fixed-income investments. To overcome these obstacles and capitalize on opportunities, investment managers must adopt a proactive approach, investing in technology, staying abreast of regulations, and adapting their strategies to meet the evolving demands of investors.
Investment advisory firms, in turn, are slow-moving and have a complex relationship with banks and brokerage houses. While they offer personalized advice to clients, they are often pressured to promote specific products from those with whom they have business agreements. This can create conflicts of interest and limit the advisors' actions.
Securitizers, which transform illiquid assets into negotiable securities, are reliant on financial institutions to distribute their offerings and often face barriers to accessing wider markets.
Even fintechs, which emerged promising disruption, ultimately integrated with conventional systems to achieve scale. This led to a loss of part of their original proposition, making them dependent on the same intermediaries they promised to replace. The FIDC crisis is an example of how this integration can fail, producing results below expectations.
Transformation with tokenization
Many entrepreneurs still seek the easiest path, opting to integrate into the traditional financial market model. However, tokenization offers a new approach, allowing these actors to uberize the sector and gain autonomy.
Thus, investment funds can tokenize their structure in various ways, eliminating steps and reducing costs. Asset managers can expand their portfolios with tokenized assets, from real estate to startups, accessing new Please provide the Portuguese text you want translated. "Pools" in Portuguese could refer to many things (swimming pools, pools of water, stock pools, etc.). distribution
Tokenization also enables advisory firms to act as structurers, sitting at the table with the borrower and negotiating like a broker. For securitizers, it will simplify the process of transforming illiquid assets into tradable securities, being the offering panel itself, providing greater clarity and accessibility. This attracts a more diverse group of investors and reduces issuance and administrative costs.
Therefore, just as Uber democratized access to transportation, allowing anyone with a car to become a driver, tokenization creates a pathway to empower those previously held hostage by banks and brokerage firms. It fosters a new financial education for investors, making everything much more coherent and transparent. This transformation eliminates so many intermediaries from the structuring of an asset, reducing costs and bureaucracy, and increasing the efficiency and transparency of the financial market.
This paradigm shift expands the reach to a global investor base and fosters the creation of financial products and services, driving innovation and competitiveness, and benefiting financial sector companies who can utilize solutions better suited to their needs.