Portuguese bank Banco Best and Credit Suisse Fund Services SA have completed a cross-border end-to-end investment fund transaction using a blockchain distributed ledger platform. The transaction was made through FundsDLT, a Luxembourg-based decentralised platform for fund transaction processing.
The transactions included every part of the fund trade process, from delivery of the order to the processing of the trade. Credit Suisse said that the ability of FundsDLT to be able to connect with other blockchains opened the door to “another milestone for transforming fund distribution”. The investment fund industry relies heavily on transactions and settlements that are often lengthy and complicated.
“This proof of concept is a great achievement and reinforces Banco Best’s commitment to be ahead of the curve,” said Carlos Almeida, Director of Investments at Banco Best. “We want to be involved in blockchain technology to work together with all stakeholders in order to adapt and seize new opportunities in our business model, with the ambition to improve the customer experience and to promote financial inclusion”.
Blockchain Technology Increases Efficiency
Pascal Nägeli, Chief Digital Officer at Credit Suisse Asset Management stated: “We continuously seek to improve performance for our clients. As part of our digitalization journey, we consider blockchain technology as a great lever to increase efficiency. With the successful completion of real, live transactions, we were able to prove that considerable benefits can be achieved with distributed ledger technology for both clients and asset managers.”
Claude Metz, head of shareholder services at Credit Suisse Fund Services said: “Blockchain technology in connection with potential mutualized KYC servicing will be a game changer for the investment funds business. This initiative benefits investors, distributors and transfer agents greatly from an operational efficiency standpoint, and we are only at the beginning of this most promising journey”.Credit Suisse confirmed that the test has been conducted but did not say whether the asset management arm, who manage funds worth more than $400 billion, would use the technology more widely. They also piloted a blockchain program with ING Groep NV in March last year that successfully transferred $30 million in funds for a securities lending transaction.
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