FundsDLT and UBS Asset Management (UBS AM) have successfully concluded a proof-of-concept pilot that aimed to explore a front-to-back blockchain-based investment fund distribution model. FundsDLT, a decentralised platform for fund transaction processing, and UBS AM were supported by experts from the i.AM Lab, a research and product development company in Zurich.
The pilot covered and simulated the entire distribution process, starting with investor onboarding, transaction initiation up to settlement and transfer agency. On FundDLT’s blockchain-based platform, all parties involved had real-time transparency on the straight-through transaction including real-time reporting and status updates.
As a result, the pilot confirmed the viability of a blockchain-based distribution model and, in general, the advantages of digital distribution of investment funds.
Speaking after the tests Olivier Portenseigne, CEO of FundsDLT, said: “Investors want an easier way to invest and asset managers need long-term solutions that enable them to transform their businesses and grow their investor base. This requires new models that focus on seamless digital delivery, automation and process and operational efficiency. FundsDLT offers a route to the future and we are pleased that UBS is working with us.”
Patric Huber, Head of Product Strategy at UBS AM said, “We see technology as a differentiator and innovation as foundational. We are constantly seeking to leverage emerging technologies to provide the best services and products to our clients. The successful proof-of-concept pilot in collaboration with FundsDLT has demonstrated promising potential of distributed ledger technology in making the fund value chain more efficient, transparent and convenient for our clients across front, middle, and back offices.”
Claudio Schneider from the i.AM Innovation Lab comments: “The proof-of-concept has shown that a distributed ledger based fund ecosystem may not only reduce costs and risks for all parties involved, but also simplifies the distribution of fund solutions with a significant improvement of the customer experience. As per our conviction, DLT will lead to more cost effective products for the investor with a greatly simplified investment journey and will have a lasting impact on the fund industry.”
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FundsDLT enables all actors of the investment fund distribution chain (asset managers, asset servicers, distributors and advisors) to sell funds through a next generation, decentralized platform, significantly reducing administration costs and the time to process transactions. It streamlines a range of repetitive fund operational activities by using blockchain to automate several processes in a secure manner.
FundsDLT is owned by Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers. The shareholding composition reflects the strategic objective to deliver a new generation of decentralised infrastructure to the investment fund industry. By enabling the re-engineering of the investment fund distribution chain, it makes fund distribution easier, cheaper and more transparent.
About UBS Asset Management
UBS Asset Management is a large-scale asset manager with a presence in 23 markets. It offers investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients around the world. It is a leading fund house in Europe, the largest mutual fund manager in Switzerland, the second largest fund of hedge funds manager and one of the largest real estate investment managers in the world.
About i.AM Innovation Lab
The i.AM Lab supports clients in the asset and investment management industry across the entire innovation cycle. From digital experiences to digital assets, from finance to art. By taking ideas from vision to reality, the Lab continuously pushes boundaries and challenges their partners to courageously explore new areas of growth.