Calastone, the largest investment flows operator in the U.K., announced in will switch its settlement system to blockchain by May 2019. This move is aimed at solving the problem of increasing fund clearing service costs.
According to Reuters, the London-based fintech giant Calastone processes mutual fund trades for over 1 700 financial companies, including JPMorgan Asset Management, Schroders, and Invesco.
The said developments will allow for automating the system which processes 9 million messages worth over $217 million every month. In its current state, the system requires three separate digital messages to be sent between interested parties to buy a fund: the first one to place an order, the second one to confirm the receipt, and the third one to confirm the price.
Calastone is reportedly basing its decision on the data from audit company Deloitte, which estimates that adopting blockchain could save the global fund industry $4.3 billion every year, as it would optimize trading and payment processing. As noted by Reuters, the fund industry suffers from ever increasing administration costs proceeding from the tougher regulation after 2008 financial crisis.
Large financial enterprises have been continuously implementing blockchain solutions to optimize their services and reduce service costs. For instance, late in October, Nasdaq exchange enhanced its finance management module by implementing Microsoft Azure Blockchain and thus ensuring compatibility between various blockchain networks within Nasdaq Financial Framework.