Global funds transaction network Calastone claims that asset managers could save $2.7 billion a year if the investment industry switched to a blockchain infrastructure.
In a recent study, which surveyed 234 global mutual funds, Calastone measured the economic impact of blockchain and automation. Improved processing time, the reduction in the number of manual errors, quicker resolution time, and greater transparency and audit traceability were among the key advantages Calastone found.
Calastone estimated that, based on daily trade volumes of funds in the UK, Ireland, Luxembourg, Hong Kong, Singapore, Taiwan and Australia, $2.7 billion in savings may be possible.
The company said the numbers represent the tangible, financial value that a blockchain-enabled distributed market infrastructure can deliver by stripping-out many of the remaining inefficiencies currently embedded in the system. It added that a distributed market infrastructure potentially offers a scalable solution to meet the needs of fund industry participants and investors now and for the future.
Calastone CEO Julien Hammerson said the results highlight the benefits of using blockchain to automate the full life-cycle of mutual fund transactions, from order placement through to the settlement and payment process.
The study follows a recent report by Forrester, which shows Calastone has already delivered more than £458 million ($639M USD) in savings for mutual funds by bringing automation to major global funds markets.
In June 2017, Calastone successfully completed the first phase of its blockchain-enabled distributed market infrastructure (DMI) proof-of-concept, and in December the company announced its core network technology will migrate onto blockchain technology in 2019.