Blockchain to the Rescue of Fund and Asset Management


New Member
Oct 28, 2017
Have you ever wondered, how your assets and securities are managed within your investment fund? Apparently, a great deal of confusion and friction exists between different intermediaries such as sell-side firms, exchanges, clearing houses, central securities depositories, payments processors. Especially because all of them use different operational infrastructures.

Moment of epiphany, isn’t it? Next time, be reminded of the scenes behind the curtains, when you get on a call with your asset manager.

But you know what, blockchain’s ubiquitous distributed ledger technology can put a rest to this commotion within the financial network. No need for intermediaries to validate financial transactions anymore.

You as the end user, the fund investor can settle all formalities with your respective buy-side firm without middleman intervention. “Smart contracts” can prove very useful in this regard.

Let’s understand this in a deeper sense. So, you have the blockchain which runs on a decentralized network across millions of computers. Consider that your asset management company, or buy-side firm gets its entire operational infrastructure set up on its own blockchain.

Now, the company can configure an executable file with its business rules implied by a financial contract. This file, also known as a smart contract can be embedded in a programming language and executed with any transaction. Smooth, right? This “smart” move, in turn can eliminate all intermediaries, leading to transparent transactions between you and your buy-side firm.