Blockchain: A storm in the Fund Industry?

In the early stage of stock exchanges, trading was a very straightforward process without any intermediaries involved. An investor was selling its asset of value and directly received a payment in return.

However, over the time, the financial industry has continuously evolved toward a more complex model where an increasing number of parties are now involved in each transaction. As we will see with a zoom on the Funds industry, this increase in complexity had a huge impact in term of cost, timeliness and regulatory requirements to process transactions.

On the other hand, a new technology has recently started to grab everyone’s attention in this industry as it has the potential to completely reshuffle it…Blockchain.

Indeed, the technology behind the digital currency “Bitcoin”, has the potential to get rid of many intermediaries of the sector by automating processes and to lead to significant time and cost savings for the fund distribution.

Read the full white paper (pdf) "Blockchain: A storm in the Fund Industry?" by our consultant Nelson Dossogne.

Summary

  • I.Introduction.
  • II.Blockchain general concept. 
  • III.Zoom on the European fund industry.
    • A booming and highly concentrated sector. 
    • Current fund industry model
  • IV.Blockchain applied to the fund industry. 
    • New fund industry model with Blockchain.
  • V. Blockchain benefits.
    • Lower operational cost and risk.
    • Faster transactions settlement time.
    • Reduced transaction costs and collateral requirements.
    • Current KYC processes: inefficiencies, costliness, and poor investor experience.
    • Blockchain and a digital KYC identity.
  • VI.Blockchain challenges.
    • Common infrastructure and standards adoption.
    • Technology issues.
    • Governance, regulation and anonymity protection.
  • VII. Adoption timeline
  • VIII. Conclusions.