ALFI: Industry keen for blockchain challenge
08 March 2016 Luxembourg
Image: Shutterstock
Blockchain is coming and, generally speaking, it is welcome, according to speakers at the Association of Luxembourg Funds Industry (ALFI) Spring Conference.
Justin Morgan-Harwood of Fidelity Investments suggested that blockchain could affect the entire post-trade value chain including transfer agency, custody, central securities depositories and depository services, as well as having the ability to transfer value through payments, clearing and settlement.
While Morgan-Harwood pointed out that it’s “not often you get to totally re-engineer a process”, Olivier Portenseigne of Fundsquare argued that there are “definitely” benefits for asset managers.
Another panellist, Philippe Denis of BNP Paribas Securities Services, added that the full operations of securities services could be affected and that, rather than considering blockchain as additional to the value chain, it should be thought of as a whole new value chain.
Several of the panellists cited the transparency allowed by the technology, suggesting that this could lend itself to technology for regulatory compliance, or ‘reg tech’.
Portenseigne added that blockchain aligns with the industry agenda of creating better transparency, reducing risk, and reducing costs, adding that it allows service providers to begin “really designing products for investors”.
Morgan-Harwood echoed this sentiment, pointing out that the industry is customer-based, while suggesting “we have to do things faster, cheaper, more transparently”, in order to create a better customer experience.
While the general message was positive, panellists also warned that the industry must adopt standards for blockchain in terms of semantics, messaging and processing in order to make it work at all, let alone to glean any value from it.
The panel also agreed that the industry must work together on the technology, with Portenseigne stressing: “Collaboration will be key”
Laurent Kratz of Scorechain warned: “Don’t let others innovate for you.”
Justin Morgan-Harwood of Fidelity Investments suggested that blockchain could affect the entire post-trade value chain including transfer agency, custody, central securities depositories and depository services, as well as having the ability to transfer value through payments, clearing and settlement.
While Morgan-Harwood pointed out that it’s “not often you get to totally re-engineer a process”, Olivier Portenseigne of Fundsquare argued that there are “definitely” benefits for asset managers.
Another panellist, Philippe Denis of BNP Paribas Securities Services, added that the full operations of securities services could be affected and that, rather than considering blockchain as additional to the value chain, it should be thought of as a whole new value chain.
Several of the panellists cited the transparency allowed by the technology, suggesting that this could lend itself to technology for regulatory compliance, or ‘reg tech’.
Portenseigne added that blockchain aligns with the industry agenda of creating better transparency, reducing risk, and reducing costs, adding that it allows service providers to begin “really designing products for investors”.
Morgan-Harwood echoed this sentiment, pointing out that the industry is customer-based, while suggesting “we have to do things faster, cheaper, more transparently”, in order to create a better customer experience.
While the general message was positive, panellists also warned that the industry must adopt standards for blockchain in terms of semantics, messaging and processing in order to make it work at all, let alone to glean any value from it.
The panel also agreed that the industry must work together on the technology, with Portenseigne stressing: “Collaboration will be key”
Laurent Kratz of Scorechain warned: “Don’t let others innovate for you.”
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