Franklin Templeton Releases Research on Tech-Driven Megatrends Reshaping Society & Investing
Franklin Templeton announces the launch of a research series by Sandy Kaul on tech-driven megatrends influencing society and investing. This series, initiated in September 2022, outlines five key megatrends: Democratization of access, Decomposition of business delivery, Expanding power of the crowd, Institutionalization of the individual, and Quantification of behavior. The research suggests that these trends will significantly impact the asset and wealth management industry as decentralization and Web3 evolve, potentially disrupting traditional finance over the next decade.
- Launch of Sandy Kaul's research series on tech-driven megatrends.
- Focus on identifying influences of the upcoming fourth cycle of decentralization on investing.
- Franklin Templeton's commitment to innovation in digital investment solutions.
- None.
In newly published paper,
Kaul’s in-depth research examines the three cycles of commercial tech-driven innovation that have taken place since the 1960s. The paper also outlines how the emerging fourth wave—Decentralization—will lead to a new peer-to-peer economy and mark the culmination of the megatrends that have been building since computerization moved into the commercial realm.
“Tech-driven cycles have already re-shaped both society and investing on three separate occasions—changing the nature of the technology we use, the way that business is delivered and businesses’ approach to building their commercial infrastructure,” Kaul notes. “Though the changes have occurred within each cycle, there have been a set of megatrends that have emerged and become amplified across the three cycles we have already completed. These megatrends will reach their culmination in the coming fourth cycle of innovation, enabled by Web3, blockchain and smart contracts.”
The five megatrends Kaul outlines are:
- Democratization of access – Today, incentives diverge—as network effects take hold on platforms, owners look to maximize profit and users seek to enhance the experience and utility. Web3 commercial protocols align incentives as the users of the networks also become the owners through direct investment and participation rewards.
- Decomposition of business delivery – Today, businesses compete by aligning alongside other businesses/apps to create a proprietary ecosystem to attract users. In Web3, competition shifts to offering composable and interoperable offerings that combine processes in new ways that get delivered directly to the user.
- Expanding power of the crowd – Today, marketing and consumer demands are shaped by feedback between businesses and consumers. Web3 puts the crowd in control as services and goods can also deliver utility and thus need to appeal to crowd factors: prestige, influence, access, exclusivity, reward.
- Institutionalization of the individual – Today, users can share their assets and resources, but platforms control the access, data and money flows. Web3 lets individuals create tokens that embed their assets, utilize them as collateral, control access and join protocols that leverage their resources to directly monetize them.
- Quantification of behavior – Today, customer behavioral analysis focuses on specific actions and assigns consumers to cohorts based on pre-defined journeys. Web3 adopts a life-centric model where each user’s assets, resources, actions and behaviors inform the presentation of goods and services.
Kaul’s research suggests that the asset and wealth management industry has already been profoundly altered by the first three tech-innovation cycles. The fourth tech-driven innovation cycle may look markedly different as decentralization disrupts many aspects of the traditional finance landscape over the next decade.
“Today’s focus on delivering tailored, customer-centric portfolios that deliver not only risk-adjusted returns, but also other goals-based outcomes and optimizations is a direct result of the AI, big data and cloud-computing capabilities enabled by the third cycle of tech innovation that began in the mid-2000s,” said Kaul.
Franklin Templeton has embraced this new solutions-focus with offerings such as the firm’s dynamic portfolio construction tool Goals Optimization Engine (GOE), its custom-indexing solution Canvas, and a suite of
“As the fourth cycle unfolds, investment portfolios will expand to include more types of digital and physical tokenized assets, and investors will look to obtain a more multi-dimensional set of returns including a broad-set of income opportunities and utility—special access, unique offers or exclusive benefits—from their portfolios,” Kaul continued.
Franklin Templeton’s first listed digital asset SMAs were announced earlier in September and will be available with a single-click access to wide variety of wealth advisor networks this fall.
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Source: Franklin Templeton
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