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Most significant advantages of blockchain over existing systems
Greater speed compared to existing systems
New business models and revenue sources
Greater security/lower risk
Lower costs
None - no perceived advantages over existing
systems
Other/not sure
32%
28%
21%
16%
2%
1%
Most significant advantage of blockchain over existing systems
Source: Deloitte
lucrative relationships with a number
of leading financial institutions, a point
made by Ruault. Fortunately, a degree of
much-needed pragmatism about block-
chain is finally beginning to sink in at
financial institutions. Rather than billing
blockchain as a cure for all the inefficien-
cies engrained across financial services,
banks are narrowing the number of DLT
“History has shown us that technology
can evolve very quickly and dramatically.”
ROB PALATNICK, CHIEF TECHNOLOGY ARCHITECT, DTCC
use cases they pursue, focusing instead on
specific problems.
JP Morgan, Northern Trust and
Santander have, for example, engaged
with Broadridge to pilot blockchain in
proxy voting, while Nasdaq is working
closely with a blockchain start-up called
Chain to successfully create its own proxy
voting solution. Market infrastructures
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Global Custodian
Spring 2019
– namely Australian Securities Exchange (ASX), SIX and Hong
Kong Exchanges and Clearing (HKEX) – are also successfully
utilising blockchain to remodel their post-trade processes.
Not exclusive to securities markets
Beyond securities markets, blockchain could potentially ration-
alise the highly intermediated and fragmented world of mutual
fund distribution. Global fund transaction network Calastone is
migrating its entire network onto a distributed market infra-
structure enabling buyers and sellers of fund units to transact
more easily with each other. At present, fund transactions are
inefficient and user-unfriendly, but Calastone believes the
mutualisation of trading and settlement processes could reduce
distribution costs by around £3.4 billion.
Some asset management groups are beginning to rethink their
product distribution models too in light of these advancements.
BNP Paribas Asset Management recently completed an end-to-
end transaction using blockchain technology supported by BNP
Paribas Securities Services’ PlanetFunds. “Fund distribution is
one area in particular where blockchain is showing a lot promise
and it is something we are actively looking at,” adds Ruault.
In addition, automation of fund administration could also be
enhanced through leveraging blockchain. Northern Trust and
IBM recently developed a blockchain-based private equity ad-
ministration toolkit giving investors and managers real-time in-
sights and enhanced transparency into their portfolio holdings,
creating widespread efficiencies and eliminating duplication.
Access to the application can also be made available to regula-