Jenny Johnson, the president and CEO of Franklin Templeton, a financial firm managing $1.6 trillion in assets, reiterated her support for blockchain technology during an interview with Bloomberg anchor David Westland at the 27th Annual Milken Institute Global Conference in California.
During their discussion, Johnson shared her insights on tokenization and generative artificial intelligence (AI).
Tokenization
When asked about the benefits of tokenization for Franklin Templeton, Johnson expressed her enthusiasm for blockchain technology. She described an experiment conducted by the company, where they compared processing account records using traditional methods versus blockchain over a period of six to eight months. The results were surprisingly positive, with Johnson stating, “We were amazed by how much more cost-effective it was to use blockchain.”
Johnson attributed this cost-effectiveness to the elimination of the “enormous costs” associated with verifying data across different systems, which is a problem that blockchain was designed to address. She emphasized that financial institutions and stakeholders still need to verify data with external parties once it is reconciled internally, but with blockchain, there is only one source of truth.
The time and money saved through blockchain can lead to more diverse investment opportunities, according to Johnson. She cited the example of pop superstar Rihanna, who released 300 non-fungible tokens that provided their owners with a small percentage of royalties for one of her songs through a smart contract.
This isn’t the first time Johnson has mentioned this example. In October 2023, she shared the Rihanna story during an interview with CNBC’s Delivering Alpha, where she discussed tokenization as “securitization done on steroids.”
Generative AI
The conversation then turned to generative AI. Johnson acknowledged the value of generative AI systems but warned that it can be unreliable in certain aspects, comparing it to a student who excels in English but struggles in math.
Johnson mentioned that Franklin Templeton recently partnered with Microsoft to develop an AI-powered sales assistant. She also highlighted the investment opportunities in the AI sector. Additionally, she praised the potential of AI-powered translation services in overcoming language barriers in finance.
In conclusion, Johnson’s interview highlighted her support for blockchain technology and the benefits it brings to financial institutions like Franklin Templeton. She also acknowledged the potential of generative AI while cautioning about its limitations.