True Potential plans to use blockchain technology to build its new investment platform.

The advice business, which recently parted ways with long-time technology provider SEI to go its own way, plans to launch the new platform in the next 12 months. 

It will be the first platform to be based on blockchain, the technology behind cryptocurrencies such as bitcoin. The idea behind blockchain is that computers in a network can quickly verify information rather than relying on external third-parties. 

Daniel Harrison (pictured), head of technology at True Potential, told New Model Adviser® this could potentially speed up transactions for advisers and their clients.

'With the way platforms work now, a client might put something on it but it will take three to five days to hit. What blockchain will do is that we get the proof that the money is good there and then. We get proof the money physically exists and we get the proof at the other end of the chain that the fund exists and this is its price today,' he said. 

This speed is completed through a system where individual computers, known as ledgers, are able to confirm they have data with each other. As the information is not stored centrally there are security benefits to blockchain as well. 

Banks and asset managers have been investing in the technology, but as none have launched yet True Potential is currently out on its own. 

'We have this strange thing where we've built the blockchain into the platform but we've got nobody to connect to on the chain,' Harrison said. 

'We are actually going to use it as an audit tool, so to speak. We will install the blockchain all along our platform processes which will look at every single process that goes on the platform.'

According to Harrison this audit process will offer clients 'extra certainty in terms of accuracy and extra certainty in terms of automation. The less people have to touch it the more accurate it becomes'. 

The project is being built entirely in-house with True Potential's 35-strong development team.

'It's not like what we've seen with other projects where millions, or indeed hundreds of millions, have been spent,' Harrison said.