ENTREPRISES & STRATÉGIES — Technologies

Comment se préparer aux enjeux technologiques liés à la transformation digitale?

Blockchain: the digital transformation under your nose


Retour au dossier

2_900x600_indiv_maxime_aerts-fundsquare.jpg

You may not be aware of it yet but a digital transformation is underway around the world that could forever change the way we get access to financial services. The disruptive technology driving this change is called blockchain and it has already had a profound impact on how we do business in the fund industry.

Blockchain came to prominence with the rise of bitcoin, a peer-to-peer electronic currency. However, its distributed ledger technology has multiple uses. Today, people use blockchain to pay for services and send money safely and instantaneously to family members around the world. The technology is also being used to create digital assets such as stocks, land titles and frequent flyer miles.

In Luxembourg, blockchain is evolving from a niche technology to a technology that has become more widely integrated within established companies.

Maxime Aerts, Fundsquare (Chief operating officer)

Blockchain has broader uses beyond just finance. Recording data and creating so-called “smart contracts” using distributed ledger technology are increasingly being used as a way of preventing information tampering. It can also be used to verify a person’s identity. Chances are that in the future when you sign into an app or website it will use blockchain in some form.

In Luxembourg, blockchain is evolving from a niche technology used by a select group of start-ups to a technology that has become more widely integrated within established companies. Last year, the Luxembourg School of Business hosted its first blockchain bootcamp, which educated business leaders about the benefits of blockchain and gave a crash course on how to use the technology in practice.   

But not all technological progress is smooth. Widespread use of blockchain could shake up the entire business model within financial services. In the fund industry, distributed ledger technology threatens to radically change the way that investors access funds, creating opportunities for disintermediation within the fund distribution value chain and significant cost savings.

 It is only a matter of time before we see the industry succumb to blockchain.

Maxime Aerts, Fundsquare (Chief operating officer)

A number of factors are driving this disruptive technology: regulatory issues, a general mistrust in financial providers and outdated physical infrastructure and legacy systems. All this suggests that it is only a matter of time before we see the industry succumb to blockchain.

Introducing FundsDLT

In Europe, efforts to introduce blockchain technology into the financial industry are beginning to take shape as well. At Fundsquare, we partnered with InTech and KPMG to launch FundsDLT, an experimentation of a new decentralised fund order processing engine based on distributed ledger technologies, digital tokens and smart contracts. The aim of FundsDLT is to create a shared economy that enables asset managers, in cooperation with existing actors, to sell funds directly to retail investors.