Technology and administration provider FNZ signed a deal with FinSwitch to provide a blockchain-enabled administration platform. FinSwitch connects the unit trust and fund management sector in South Africa.
The South African group serves 140 fund managers and distributors in the region by providing a solution for transaction and other data, reconciliations and regulatory reporting.
Finswitch will use FNZ’s ChainClear system to create a single “source of truth” for fund management transactions. The platform that uses Hyperledger Fabric covers trading, settlement, transfers, distributions and reconciliations. In the latter case, reconciliation is effectively eliminated because of data sharing. Transactions can be synchronized in real-time, and it enables instant settlement or delivery versus payment.
“FNZ was selected after a comprehensive and competitive tender process,” said Nick Baikoff FinSwitch Managing Director. “We look forward to working with them to implement this solution, that will deliver significant value for our clients in the form of reduced cost, complexity and risk.” The platform will go online for FinSwitch clients later in the year.
ChainClear provides the primary legal register and went into production in the UK March 2019 with initial clients Equity Trustees, Host Capital and Tutman distributed via the Aviva UK IFA and D2C platforms.
FNZ started in New Zealand, has offices around the world and is headquartered in the UK, which accounts for most of its business. In 2018 it had £127 million in revenues ($155 million) and in February this year had more than £400 billion ($488 billion) in assets under administration. At that time, it attracted investment from Temasek, Singapore’s sovereign wealth fund. FNZ’s clients include Aviva, Barclays, Generali, Santander and UBS.
ChainClear isn’t the only fund management platform using blockchain. In May of last year, Calastone rolled out its blockchain solution to its 1,800 clients. One of the first fund management solutions was IZNES in the French market, initially developed by London-based SETL. In September 2018, Swedish bank SEB teamed up with Nasdaq to test a fund trading platform.
Luxembourg Stock Exchange subsidiary Fundsquare has developed the FundsDLT platform, which recently closed a Series A from Clearstream, Credit Suisse Asset Management, Natixis Investment Managers and others.