By Daniel Lanyon on Tuesday 6 December 2022
The blockchain has gone live in Australia via a partnership between Vanguard, Grow and R3’s Corda.
For a long time blockchain was often labelled a solution without, barring cryptocurrency speculation, a problem.
But distributed ledger technology or ‘DLT’ as it is also known has more recently been touted to do the sort of back office functions for the vast asset management industry that will finally prove its worth.
Now, Vanguard Australia has deployed blockchain technology to underpin, improve efficiency and reduce risk in Australia’s financial services industry.
The new tech will bring a shared system of record for all fund and investor transactions and holdings, replacing a costly, time-consuming and inefficient spreadsheet-based reconciliation process.
Previously, this led to higher costs for customers as well as a “ significant risk of manual error”.
“The focus on higher volume join and money in transactions being straight through process has been validated. The product verification phase allowed us to iron out most of the potential issues, and the partnership with GROW started strongly,” said Michael Lovett, CEO at Vanguard Super Australia.
It is not the first time a large blockchain-based project has been applied to Australia’s financial services sector. The Australian Securities Exchange (ASX) last month mothballed its own plan CHESS to replace its settlement system with a blockchain-powered ledger after an apparent failure.