Zürcher Kantonalbank (ZKB) and Deutsche Boerse’s post-trade services provider Clearstream processed their first live blockchain-based end-to-end fund transactions, using FundsDLT, a decentralised platform for fund transaction processing.
ZKB was the first to leverage the joint FundsDLT and Clearstream solution, with an end investor placing a fund transaction request via a mobile app directly on the private blockchain.
The order was captured and delivered to Clearstream’s fund processing platform Vestima via the blockchain.
The overall processing time for an investor order was reduced from several hours to only a few minutes, according to Clearstream.
The order was captured and delivered to Clearstream’s fund processing platform Vestima via the blockchain.
ZKB’s client received real-time updates and, after a few minutes, the transaction confirmation on the app – a process that could commonly take several hours before.
Peter Hubli, head of digital asset solutions at ZKB, says: “With FundsDLT we convinced ourselves of the potential for the entire value chain in the fund business, including the improvement of customer experience, efficiency in the settlement process and the reduction of costs.
“The proof of value allowed us to have a sneak peek into the future of the fund industry, its potential and impact not only for ZKB, but also for our clients and partners. By leveraging blockchain technology, we get both an overview of the entire flow of assets and money and can also identify and understand investor's needs.”
This particular cross-border distribution of an investment fund between Switzerland and Luxembourg showed that distributed ledger technology (DLT) can foster more efficient, scalable and faster fund investing for all market participants, says Clearstream.
ZKB states it exploited its existing connection to Vestima and triggered the blockchain-based fund transactions via API delivered by FundsDLT, allowing ZKB to access all 48 connected fund markets without the need for additional onboarding processes.
Bernard Tancré, head of investment fund services product at Clearstream, says: “Integration with FundsDLT was very efficient and straight-forward. It is important that our customers can leverage the advantages of blockchain starting today, with access to a large investment funds portfolio via proven, regulation-compliant and safe fund processing environments.
“This initiative significantly increases operational efficiency for investors, distributors and transfer agents, and we are only at the beginning of this most promising journey.”
Olivier Portenseigne, CEO of FundsDLT, adds: “We are delighted to see a bank such as Zürcher Kantonalbank push forward and explore the value that the collaboration between FundsDLT and Clearstream can deliver to the wealth management side.
“Digital transformation is today paramount for financial institutions and our goal is to enable fund distributors to simplify their business and operating model and build the technology foundation to enable their clients to connect to fund products anywhere and in an easier manner.”
.jpg)