Irish Funds and Deloitte Complete a Blockchain Proof of Concept

Irish Funds today announces that it has, in collaboration with Deloitte and participants from leading global asset servicing and fund management institutions including Deutsche Bank, Metzler, Northern Trust and State Street, successfully completed its blockchain proof of concept for regulatory reporting, “RegChain”.

The proof of concept tested the application of blockchain technology and its functionality for the capturing of transactions, the management of reporting with smart contracts capability and enhanced compliance, which increased transparency and developed a cost benefit analysis study to measure the benefits of future blockchain solution. The technical build used Ethereum and IPFS (InterPlanetary File System).

The project, which focused on the Resident Investment Fund Returns (Money Market & Investment Funds Returns Reporting or ‘MMIF Reporting’), resulted in the design and development of a proof of concept leveraging blockchain and smart contract technology to create a platform for regulatory reporting accessible to the reporting entity as well as a regulator.

Key findings from the project included:

  • Blockchain can act as a secure store of data, improve data quality and integrity, and increase efficiency surrounding the regulatory reporting process through the application of smart contract capability.
  • Blockchain can help in the overall management of regulatory change requests as well as facilitating additional or new reporting requirements. Within the blockchain a change can be coded once on the platform and then progressed across the network to all participants as opposed to each institution managing a change request in their own operations.
  • Ancillary benefits of blockchain technology, for regulatory reporting, include the provision of a safe network for data sharing and transmission, the creation of a rich and trusted data set upon which analytics can be applied, built-in disaster recovery and the ability to develop new capabilities such as automated compliance.
  • The proof of concept solution can be adopted to incorporate other regulatory reports such as  AIFMD Annex IV
  • Blockchain projects require a multi-disciplinary approach. New solutions must be cognisant of existing industry requirements and built for varying needs across the operational world if they are to be successful and advanced to pilots and production in the short term.

Commenting on projects success, Irish Funds CEO, Pat Lardner said: “The successful completion of this project is an important first step in demonstrating the power of Blockchain for regulatory reporting and industry collaboration around innovation. This foundation will enable additional development and progress to be made with other key stakeholders and confirms Ireland’s place a leading location for FinTech globally.

David Dalton, Head of Financial Services at Deloitte Ireland, and sponsor of Deloitte’s EMEA Grid Blockchain Hub commented: “Deloitte are delighted with the progress made by the collaboration with Irish Funds and funds industry participants. We look forward to seeing how we bring this to production and extend blockchain further into the funds industry.”

Also welcoming the project findings and broader industry collaboration in Ireland is Keith Fingleton, IDA Ireland and Chairman of the Irish Blockchain Expert Group who said “It is excellent to see Irish Funds taking the lead and developing a forward thinking approach to easing the regulatory burden of their members. Once again it shows Ireland as a location to undertake innovative solutions, in a collaborative manner, to help solve complex business problems.

Author: Dylan Jones

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