The Fundchain initiative starts again this year with new Research & Development roadmap for the investment fund industry
Fundchain has announced today the return of the collaborative initiative to make Blockchain applications real for the funds industry ecosystem.
This year, new major financial institutions have joined the Luxembourg initiative led by the startup Scorechain where participants now include Brown Brothers Harriman, European Fund Administration (EFA), HSBC, ING Luxembourg, Pictet, RBC Investor & Treasury Services, PwC Luxembourg, Schroders and SWIFT.
The aim for this second phase is to go beyond prototypes and to define ready-to-use products that the industry could implement in the short-term. All participants are currently working together with the technological support of Scorechain to focus on use cases subject to Blockchain redefinition.
Pierre Gérard, Scorechain CEO and Fundchain Project leader says: “During Fundchain 2016 we had a global approach and we gave an overview on how the Blockchain could impact the fund industry. The new phase will concentrate on topics that could be implemented in a really near future. Thus, the technological feasibility, the business model, interoperability and any regulatory impacts will be analysed. Non core business use cases might be the good targets”
Last year, after 6 months of research, the publication of a white paper on the impact of DLTs on the fund distribution value chain and a regulatory study, the group has finally decided to focus its research on the transfer agents processes. The prototype has been unveiled through the name of the ‘Smart-TA’. Using a private Ethereum blockchain that works, the PoC unveils how a distributed ledger can incrementally improve and automate processes for digital shares transactions. With a user-friendly interface the Smart-TA shows how Blockchain technology can bring efficiency and transparency for all industry participants involved in such activity, from customers to regulators.
Scorechain S.A launched the Fundchain initiative in 2016. The aim is to develop solutions using Distributed Ledger Technology and smart-contracts to act as innovation pioneers for the investment fund industry in Europe.
Luxembourg, 18th October 2017
FUNDCHAIN Initiative: Fundchain unveils first insight of Blockchain Proof-of-Concept for the investments funds industry: The Smart TA
The Luxembourg-based Blockchain consortium initiated during the summer, is now ready to unveil its first outcomes following 6 months of collaborative work.
A 2-day hackathon to achieve the development of the Proof-of-Concept
After several workshop sessions, the group decided to initially focus its research on the fund distribution value chain. The aim was to introduce an easy to replicate Proof-of-Concept to the fund ecosystem. With the support of the University of Luxembourg, almost 80 people from every participating organization, came together to finalize the prototype during a 2-day hackathon. The event mixed fund industry professionals with business and technical backgrounds with, Blockchain academic researchers and Blockchain specialists from Scorechain. For 2 days, business and technical teams worked alongside to finalize the ready-to-use PoC.
For Laurent Kratz, Scorechain co-founder, “It’s exciting to see how this initiative built up a real synergy between major financial institutions, not only with Scorechain but also between all of them. What is also promising, is that the group is always improving the PoC with the use of our collaborative platform.”
The fully decentralized Smart TA finally unveiled internally, is running on an Ethereum private Blockchain
The collaborative and inclusive approach to the Hackathon, led to the presentation of the Smart TA prototype. Overcoming the main challenge of replicating the fund distribution value chain specifications through a Distributed Ledger Technology (DLT) infrastructure, the Smart TA is a Blockchain-based platform enabling digital share transactions. Different roles were assigned to connect and act within the private Blockchain. An investor has access to Fundstore, while an asset manager, or fund administrator can interact with the subscription process.
The Smart TA prototype shows how the DLT can facilitate and automate procedures while reducing operational inefficiencies and errors. Interactions between intermediaries are decentralized, faster, and more transparent. Ethereum (the selected technology), has been turned into a private Blockchain. In this peer-to-peer environment, each user connects via their unique Blockchain node for real-time synchronization between all members. This approach proves the technology is operational and ready to target the fund industry’s needs. Fundchain’s efforts may be considered as a major step forward for the Luxembourg investment fund ecosystem, especially now that market leaders agree that DLT is an opportunity to confirm the country’s leading position in Europe.
The next step will be to assess the regulatory challenges of the Smart TA business model. Fundchain intends on presenting the Smart TA over the coming weeks to the regulator.
The Fundchain initiative was launched in the summer with 10 key market players of the fund industry — BIL, BNP Paribas Securities Services, CACEIS, European Fund Administration (EFA), HSBC, ING Luxembourg, Pictet, RBC Investor & Treasury Services, Société Générale Bank & Trust, and Professional Services firm PwC Luxembourg —, the University of Luxembourg (SnT) and the Blockchain startup Scorechain. The aim is to develop solutions using Distributed Ledger Technology and smart-contracts to act as innovation pioneers for the fund distribution value chain in Luxembourg.
Luxembourg, 15th December 2016
FUNDCHAIN Initiative: Investigating the potential benefit of Blockchain to the Luxembourg fund industry
Scorechain the Luxembourg-based company has announced today the constitution of an innovative group of 10 key players of the Luxembourg fund industry to explore Blockchain technology’s impact on asset management business.
Ten founding members representing major financial institutions including BIL, BNP Paribas, CACEIS, European Fund Administration, HSBC, ING Luxembourg, Pictet, RBC Investor & Treasury Services, Société Générale Bank & Trust, and Professional Services firm PwC Luxembourg have joined forces with Scorechain.
The initiative named Fundchain started during the summer and is now exploring how the Distributed Ledger Technology may help the fund industry improve efficiency and create new business opportunities.
Luxembourg, 6th October 2016