by JP Buntinx
Luxembourg is a country that is often overlooked by financial experts. But things are evolving at an accelerated pace behind the scenes. The new FundChain initiative will investigate the potential of distributed ledger technology for the Luxembourg fund industry. A total of 10 key players come together to form this innovative group, headed by Scorechain.
More Potential Use Cases For Blockchain Technology
Scorechain has formed a powerful alliance with some of the world’s leading financial institutions. Partners for the FundChain initiative include BNP Paribas, HSBC, Société Générale Bank, and PwC Luxembourg. All of these entities will come together and collaborate on integrating blockchain technology into Luxembourg’s asset management industry.
It is not the first time that the name FundChain has been mentioned in the media. The initiative itself was first announced in the Summer of 2016 and looks at ways to use distributed ledgers in the fund industry. Additionally, this research group will also explore new potential business opportunities revolving around this technology, such as in the fund distribution and asset servicing industry.
Scorechain CEO Pierre Gerard stated:
“As any Blockchain initiative the network effect is the main key to success. We aim to move beyond slideware and begin developing prototypes to test their integration within existing infrastructures. We have already identified several use cases in the fund distribution and asset servicing industry that could be interesting topics.”
Blockchain technology can disrupt the financial sector as we know it. With multiple intermediaries interacting with one another on a regular basis, using a shared ledger of information makes a lot of sense. Right now, most of these interactions rely on manual processes. Moreover, there is a big risk of dealing with human error, causing further delays and incurring more overhead costs.
Shaping The Future of The Investment Fund Industry In Luxembourg
Embracing new technologies is paramount in the financial sector right now. HSBC, one of the FundChain partners, wants to be a leader in developing new solutions using distributed ledger technology. Collaboration allows for the creation of new standards, created by the industry for the industry.
The fund industry is very specific to Luxembourg’s financial sector. Using blockchain technology opens up exciting opportunities, and all initiative participants are looking forward to developing new solutions. Reducing costs and improving the efficiency in the operation of investment funds is of the utmost importance.
Blockchain technology seems to make all of that possible, although there is still a lot of research that needs to be done; nevertheless, Fundchain’s research findings will be made available over the coming weeks.