Speed, collaboration, and investor protection: all three will be crucial for Luxembourg if it is to lead the way in implementing Blockchain technology in the fund industry.
Speed, collaboration, and investor protection: all three will be crucial for Luxembourg if it is to lead the way in implementing Blockchain technology in the fund industry. This was the message of technology experts at the first KPMG Digital Fund Series event, a morning conference about the financial technology Blockchain and its uses in the fund industry. Over one hundred financial professionals gathered at KPMG Luxembourg’s 39JFK headquarters in Kirchberg for an overview of a technology that promises to transform financial services.
Keynote speaker Eric Larchevêque, CEO of Ledger, explained: “A blockchain is a fully digital distributed ledger. It’s completely transparent, trustworthy and self-managing. There is no third party recording transactions – everything is taken care of by the underlying technology meaning that the ledger can’t be tampered with or falsified. For a complex industry like investment management, the potential here is huge. It could lead to substantial cost-saving and better efficiency in the industry.”
The conference speakers explained how some of the main applications of Blockchain in the fund industry are in the very area in which Luxembourg excels: back office services. The technology can help make many processes more efficient and will change the landscape for transfer agents, custodian services and clearing houses. As such, Luxembourg could have a key role to play. Ravi Beegun, Head of Investment Management at KPMG Luxembourg, commented: “On the one hand, Blockchain has the potential to streamline back office operational flows, addressing the cost challenge in the industry. On the other, it can facilitate the onboarding of new fund investors, particularly in emerging economies where distribution channels are not that widespread: this will help with revenue growth. The gains are therefore two-fold.”
In addition to cost-saving and revenue growth, keynote speaker Pierre Gerard of Scorechain S.A. was also keen to point out other advantages that Blockchain can offer the industry.
“Blockchain brings better investor protection, as it provides solid, irrefutable proof of the ownership of assets. It can even be used by regulators to better monitor the industry and ensure compliance. The industry therefore has much to gain from adopting the technology and adapting it to its needs.”
The keynote section was followed by a lively panel discussion with Eric Larchevêque of Ledger, Fabrice Croiseaux of InTech S.A. and Laurent Kratz of Scorechain S.A.. The panel was moderated by Said Fihri, Associate Partner at KPMG Luxembourg.
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