• The removal of
intermediaries from asset
transfers by the blockchain
relies on a tamper-proof ledger.
Transactions can be verified
and traced without the need for
a trusted third party. Since
there is less human input, the
risk of error is substantially
reduced.
• Reduction of settlement/
delivery and compliance costs
following market transactions
as well as custodian costs for
collective investment
undertakings. The blockchain
can provide certification for
each stage of the process,
allowing a significant reduction
in overhead and operating costs
at this level. Although traders
may react in nanoseconds,
settlements can take several
days. Spanish bank Santander
believes that blockchain
technology will allow banks to
save US$ 20 billion each year by
reinventing the back office17.
Illinois start-up Blockchainiz is
currently developing projects in
this area, working in particular
with leading banks to reduce their
reconciliation costs in asset
management. For all compliance
issues, the data needed to ensure
compliance with applicable
regulations may be written onto a
blockchain that can be accessed
and audited by all parties or by
authorised parties, as applicable.
A new method of pricing assets:
the blockchain should help to
reduce fraud risk and to refine
risk assessments thanks to its role
as a distributed ledger enabling
all parties to obtain the data they
need. This could pave the way for
a faster, more efficient asset
pricing process.
