The pace of innovation has been hectic in the past few years with the surge of new disruptive technologies such as Blockchain. The blockchain potential in financial services is huge and can be considered as one of the main drivers for substantial cost saving in this arena.
Nowadays, it can be seen how the broad adoption and integration of blockchain is becoming a practical solution in the B2B marketplace.
Fund transaction network Calastone plans to move its entire network to blockchain technology in May 2019 via its new Distributed Market Infrastructure (DMI). As reported in December and June last year, there have been talks and preparations for this migration of more than 1,700 financial organizations across 40 markets.
Blockchain was tested by the firm in 2017 to buy and sell mutual funds, after which the firm said that the results were satisfactory, using multiple data centers and clouds to protect the system.
Calastone believes that the overall global cost of fund distribution could be reduced by as much as £3.4 billion, achieved through the technological mutualization of the trading and settlement processes.
Julien Hammerson, chief executive of Calastone, said:
“The current system for transactions was economically and operationally unsustainable.”
Campbell Brierley, Calastone’s chief innovation officer, comments:
“By bringing all trading relationships together, within our shared blockchain-enabled infrastructure, all participants benefit through the real-time view of each record and powerfully, from a data perspective, a single version of the truth.”
He also added that this alleviates common friction points such as reconciliation and settlement.
In reference to the big industry transfer to blockchain network, Andrew Tomlinson, chief marketing officer at Calastone said,
“The more you can automate, the more you de-risk, you more you streamline, the more you speed up.”
Link to the original news article can be found here.
Calastone is a global transaction network for the mutual fund industry. The firm is headquartered in London and has offices in Luxembourg, Hong Kong, Taiwan, Singapore, and Sydney.