FNZ unveils market infrastructure for asset managers on blockchain
FNZ has partnered with a consortium of global fund managers, including Aberdeen Standard, Equity Trustees Fund Services, Kames Capital, Legg Mason and Merian Global Investors, to launch a production blockchain-powered market infrastructure for asset management.
“We are committed to lowering cost and risk” – Phil Goffin, FNZ
The FNZ solution, “FNZ ChainLink”, leverages blockchain technology to replace the thousands of copies of transaction and holdings with a single source. This vastly reduces cost, complexity and risk in back-office operations.
“The global fund industry today relies on a plethora of peer-to-peer connections between investors, managers and platforms to effect basic fund activities such as trading, settlement, transfers, distributions and reconciliations,” observes Phil Goffin, head of innovation at FNZ.
He adds: “None of these transactions are synchronised in real-time. Everyone has a different view of ‘the truth’, that often persists for days and months, leading to errors and exceptions, high back-office costs and risk for all participants.”
FNZ ChainLink creates the main legal register for the fund and all associated transactions directly into blockchain, making it simultaneously accessible to all, eliminating the effort of reconciliation.
Adrian Durham, FNZ CEO and founder, comments: “FNZ processes, on average, half a billion pounds sterling in mutual fund orders every day in the UK, and over a billion pounds on peak trading days. We are committed to lowering cost and risk, not just for FNZ, but for the entire industry. We also plan to evolve the nature of managed funds themselves, enabling innovation in how asset managers deliver solutions for retail investors.”
The system went into production in March 2019, initially with funds from Equity Trustees, Host Capital and Tutman distributed via the Aviva UK IFA and D2C platforms. After a month of operation, FNZ is now working to extend FNZ ChainLink across UK investment platforms and asset managers.
