Deloitte creates a blockchain platform for the distribution of Investment Funds
Deloitte Portugal was responsible for developing a platform for the distribution of Investment Funds based on blockchain technology, which was recently presented by the Portuguese Association of Investment Funds, Pension Funds and Asset Management. The project aims to simplify and make the distribution of Funds in Portugal more efficient, and to reduce the requirement of intervention of third party entities. This project relied on the partnership with Instituto Superior Técnico and on the monitoring of Portuguese Securities Market Commission.
“We believe Blockchain technology will have a significant impact in the global financial system. In the Funds industry it has the potential to not only make operations more efficient but also and foremost to increase the breadth and depth of the products and services that will be available to investors in a digital real time environment” states Nuno Alpendre, partner in Banking sector at Deloitte Portugal.
The proof of concept implemented by Deloitte Portugal, alongside with the EMEA Grid Blockchain Lab of Deloitte Ireland, has allowed to validate the applicability of the blockchain technology, to verify its flexibility and efficiency in the operationalisation of financial procedures such as subscription, redemption, cancelation and reporting of funds through this platform. In view of the positive evidences demonstrated, this solution will be presented by the Portuguese Association of Investment Funds, Pension Funds and Asset Management, over the next months, to various stakeholders that are involved in the distribution of Funds nationwide. Meanwhile, a pilot test with a group of pre-designated entities will be evaluated.
Despite the technological improvements registered over the last decades, the operationalisation of the processes concerning the distribution of Funds have remained unchanged. The current process comprises multiple communications between the entities involved, using non-standardised formats and strongly depending on back-office work for information reconciliation.
With the blockchain technology and particularly with this platform, it will be possible to perform automatic transactions without the intervention of third parties and also keeping a permanent and immutable record of all transactions. These records are shared and available to all network participants, in a safe and real time manner, consequently eliminating redundancies and releasing necessary resources.
In addition, the collection of information for reporting purposes will become more efficient and less costly, facilitating the market regulation and helping to respond to the demand’s needs for more accuracy and transparency for the reporting of the operations, ensuring an effective market monitoring.
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