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What Could Save Asset Managers USD 2.7bn a Year? Blockchain

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Should the investment industry switch to blockchain, as opposed to manually buying and selling funds, asset managers would be looking at saving USD 2.7 billion annually, according to research reported by the Financial Times.

Technology company Calastone said blockchain could revolutionise the processes involved in buying and selling funds, generating large savings for investors in the process. By their estimation, it would be possible to save up to USD 2.7 billion, based on daily trade volumes of funds in the UK, Ireland, Luxembourg, Hong Kong, Singapore, Taiwan and Australia.

Ken Tregidgo, Deputy CEO of Calastone, said that the current method is slow and prone to errors, since different companies often have to input the same information.

Last year, Calastone said it had successfully used blockchain to buy and sell mutual funds under test conditions and found the technology capable of processing all the necessary transactions – so the implementation of this solution is not be too far away, already being scheduled for 2019.

Several initiatives are already investigating how blockchain can be used in the industry.

Meanwhile, as reported earlier, the World Food Programme (WFP) is expanding its blockchain-payments system and is expecting to cut millions of dollars in bank transfer fees by switching to distributed ledgers based on Ethereum’s cryptocurrency network. The WFP has an annual budget of USD 6 billion that they feel they could spend in better ways.