FundsDLT is a decentralised technology platform based on distributed ledger technology (DLT) that enables the reengineering of the investment fund distribution value chain, from front to back, covering the entire fund lifecycle. Our fully integrated model makes investment fund distribution easier, cheaper and faster.
FundsDLT is shifting the technological paradigm in the wealth and asset management industry using a decentralized network and APIs. We streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The platform enables a cooperative ecosystem between all actors in the investment fund distribution chain to exchange data in real time and remove redundant activities.
Launched in 2020, FundsDLT operates mainly in Europe and is backed by four major players in the industry: Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers.
Thought leader
Oliver Portenseigne was appointed CEO of FundsDLT in May 2020. Prior to this, he led the development of FundsDLT from its inception in 2016 as a project for growth and change initiated by the Luxembourg Stock Exchange and its subsidiary Fundsquare.
From 2013 to 2020, he was also the Managing Director of Fundsquare, the fund market infrastructure leader in data management and exchange. During his leadership, the company experienced high levels of growth and new business and he oversaw the launch of numerous new products and services.
Olivier has more than 25 years of experience in the fund industry and he previously held various senior management positions related to shareholder services and distribution support at RBC Investor & Treasury Services.
Q&A with Olivier Portenseigne
How is DLT and Blockchain reshaping wealth and asset management? Where is the industry today and how do you foresee things changing in the future?
We are at the first stages of realizing the opportunities of blockchain-based infrastructure for wealth and asset management. There are numerous individual initiatives and products, all impressive, but each is solving a small part of the puzzle. Blockchain has great potential for wide-ranging structural change and the creation of entirely new business models for wealth management.
In the short term, some of the challenges are not so much technical but rather of mindset. The first is viewing blockchain as an IT issue or as a type of software cost, rather than looking at the transformational nature of the technology. This viewpoint goes hand in hand with the need for specific talent and organizational change expertise within an organization. Incumbents and disruptors should work together in this respect for industry-wide cooperation and solutions. This is part of the current trust aspect that is slowing adoption in general.
Replacing legacy systems is resource consuming and time intensive. They may continue to exist alongside DLT-enabled ecosystems for quite some time and the speed and pace of adoption is an open question at this stage. Interoperability is an additional challenge and international standards for blockchain are still being worked out.
Why should wealth managers get up-to-speed on Blockchain & DLT technology now and in what ways can it benefit their business today?
The advantages and benefits of blockchain can be divided into two groups: operational efficiencies and reshaped business models.
In certain areas, the wealth and asset management industry is running costly, inefficient systems and processes across multiple ledgers that have not fundamentally changed for decades. Added to this are pressures to reduce costs across the board and the regulatory push for greater transparency. Blockchain can provide an immutable record across a range of processes, thus flattening an entire chain. It can cover, and therefore greatly improve, the entire client experience. DLT offers the possibility of process automation and efficiency for frictionless investor onboarding and account creation, including all KYC and AML procedures, for order processing and realtime settlement and for reporting and client servicing, among others.
On the business side, using blockchain unlocks the ability for deeper relationships with distributors and investors. For some time, wealth managers have been in a transition phase from traditional face-toface client management to digital delivery. However, client expectations of digital solutions and delivery have changed: they now expect rapid, seamless access with personalized services. A blockchain-based infrastructure provides an exceptional, data-led view of investment flows and client behavior that provides the wealth manager with ongoing scope for product and service innovation and to grow the client base. Such a relationship can be extended throughout the value chain.
How do you foresee the role of Blockchain & DLT in the next wave of transformation in wealth management?
The immediate result of greater blockchain adoption in wealth and asset management is simply cheaper, easier and faster services.
Financial inclusion is therefore improved as this will attract larger numbers of potential clients to wealth managers, who before may have been perceived as out of reach. In addition to the two groups of benefits mentioned above, a third group of specific interest to wealth management is asset tokenization and the creation of new asset classes arising from the use of blockchain in other industries and sectors, such as fractional fine art or real estate ownership and investment. Direct to Consumer (D2C) models will be more common and blockchain will facilitate and encourage this trend.
Regulators will continue to take an interest in DLT, not in order to regulate the technology but to harness its power for better regulatory reporting and market views. In the long term, we can take a safe bet that DLT will become ubiquitous in many industries and wealth management is no exception. Blockchain is a fundamental game changer is many respects and will change the way the wealth management industry does business.
What solution(s) does your company offer that wealth management firms should consider?
FundsDLT Platform Solution for wealth managers
FundsDLT provides a shared platform built on distributed ledger technology that aims to generate efficiencies, transparency and better client experience all along the investment fund distribution chain.
Wealth managers can streamline a range of tasks by using the FundsDLT blockchain to automate processes in a secure manner. The platform facilitates data exchange in real time and eliminates redundant activities.
Overview
The FundsDLT Platform Solution for wealth managers delivers:
- Digital account opening and position maintenance
- Transaction and order processing
- Cash settlement
- Reporting
- API portal
- Cloud native.
The solution integrates:
- A KYC solution with digital investor onboarding
- A fund data hub delivering all information for investors and asset and wealth managers
- User interfaces.
Benefits
At the heart of the FundsDLT Platform Solution for wealth managers lies real-time interoperability between all actors involved in investment fund distribution. This cross-boundary integration has many benefits and produces much operational efficiency.
Wealth managers have access to improved information and data flows and collaboration throughout the distribution chain.
The digital transformation of the investment process results in:
- Greater operational efficiency
- Increased transaction speeds
- Reduced costs
- Simpler and faster investor onboarding
- Improved buyer and user experiences.
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About FundsDLT
FundsDLT is a decentralised technology platform based on distributed ledger technology (DLT) that enables the reengineering of the investment fund distribution value chain, from front to back, covering the entire fund lifecycle. Their fully integrated model makes investment fund distribution easier, cheaper and faster. FundsDLT is shifting the technological paradigm in the wealth and asset management industry using a decentralized network and APIs, streamlining a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner.
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