Irish Funds, the association representing the Irish funds industry, and Deloitte are to develop a blockchain proof of concept for regulatory reporting focused on the Money Market & Investment Funds Return Reporting regulation.
The idea is to use blockchain technology and “smart contract technology” to enable regulatory reporting that is accessible to both the company that is reporting as well as the regulator that requires access to the reports.
By developing a proof of concept, Irish Funds hopes that it will be able to test the cost/benefit associated with the technology, as well as levels of transparency and adherence to compliance.
The project will also involve asset managers and asset servicing companies, including Northern Trust, State Street and Metzler. Deloitte’s EMEA Grid Blockchain Lab in Dublin will lead the project.
Blockchain as a technology concerns the use of s0-called distributed ledgers; blocks of data that are linked, and in which each block of data cannot be altered retroactively. It is linked to the development and implementation of the bitcoin digital currency, as a way to operate an open, distributed ledger that can, for example, keep an eye on the number of bitcoins in circulation.
Deloitte previously said when setting up its Dublin Lab that “the team will focus on developing strategic blockchain capabilities and proof-of-concepts into functioning prototypes to create ‘ready to integrate’ solutions for financial services clients.”
“It is already achieving success in this regard, having worked with Bank of Ireland to complete a joint proof-of-concept trial which combines the technology with the bank’s existing systems to provide next generation client experience and regulatory oversight at a lower cost.”
Deloitte also said that it was seeing demand for blockchain implementation driven by the financial services industry looking for solutions that provide improved transparendy, efficiency and trust, with its clients looking to use the technology in areas including payments and transfer clearances, settlements, reconciliations and digital identities.
Irish Funds CEO, Pat Lardner said of the latest project announced that: “Regulatory reporting is a key obligation for our members and an area of priority focus for the Central Bank of Ireland in 2017.”
Keith Fingleton, IDA Ireland and chairman of the Irish Blockchain Expert Group, said: “Blockchain is a key disruptive technology that has the potential to revolutionise the funds industry. It is excellent to see Irish Funds taking the lead and developing this proof of concept, which will help prepare their members for the regulatory and technical challenges that lie ahead.”