By Daniel Lanyon on Wednesday 10 January 2018
Blockchain is the technology underpinning crypto currencies such as Bitcoin and many expect it to also revolutionise other areas of finance.
Blockchain is the technology underpinning crypto currencies such as Bitcoin but many expect it to also revolutionise other areas of finance.
BNP Paribas Asset Management has successfully tested fund distribution powered by blockchain technology.
Blockchain is touted as a revolutionary technology to underpin data systems in a way that will reduce costs and friction for both buyers and sellers, which in an enormous market such as fund distribution has got many banks and asset managers very excited.
While the technology has been used for nearly a decade, most famously in Bitcoin, applications such as this test within large banks are still in their infancy.
It was conducted using BNP Paribas Securities Services’ blockchain programme, Fund Link and FundsDLT.
The latter is a blockchain-based decentralised platform for fund transaction processing, which has been developed through collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg.
The test, the firm said, demonstrated that Fund Link is able to connect with other blockchains. The transaction included each part of the fund trade process, from delivery of the order to the processing of the trade.
BNP Paribas Asset Management had a busy year integrating fintech and disruptive finance into its core services last year as well as being an active investors in the space.
In December it launched a specialist fund with a mandate to invest in disruptive tech, in November it took a 10 per cent stake in SME Credit platform Caple as well as more broadly increasing its activities in the non-bank lending market.
Fabrice Silberzan, chief operating officer at BNP Paribas Asset Management say the use of blockchain by the banking giant could be transformational.
“We have a unique opportunity to continue shaping the future of the asset management industry using digital technology, and transform the fund distribution process,” he said.
“While investors will benefit from reduced transaction time, we will also profit from a sleeker, more streamlined system underpinned by technology and relevant for all fund types and geographies,” he added.