Blockchain Technology for the Mutual Fund Industry

National Seminar on Paradigm Shifts in Commerce and Management 2018 in Congruence with Block Chain Accounting. (pp. 12-17), 2018

6 Pages Posted: 26 Nov 2018

See all articles by Vijaya Kittu Manda

Vijaya Kittu Manda

Gandhi Institute of Technology and Management (GITAM), Institute of Management

Prasada Rao S.S.

GITAM University, Visakhapatnam - Department of Finance

Date Written: November 1, 2018

Abstract

Blockchain and other business disruption technologies have created a buzz in the last few years and have become an inevitable discussions topic in the financial circles. It will have game-changing impact on businesses, particularly on the banking and financial services. Consortium or Enterprise Blockchain is the latest technological evolution allowing us to build hybrid blockchains (public and private) using features such as permission restriction and multiple controlling authorities. These hybrid features allow easy yet controlled information sharing between various stakeholders. After getting acceptance in areas such as remittance & supply chain financing, blockchain is now making inroads into sub-sectors such as asset and wealth management.

This article demystifies blockchain concepts and demonstrates an implementation for the mutual fund (MF) industry. MF industry is plagued by slow processing. For example, it takes days together to onboarding a new investor, transactions take a date to appear on statements while NAV computations takes hours to compute and show up for registrars to process transactions. We explore how smart contracts can help cut the transaction processing but will blockchain provide high speed and latency necessary? Can investor statements be accessed dynamically? Will distributed information sharing and decentralization system save costs and time for the stakeholders, particularly in client onboarding, NAV dissemination? How can blockchain help in KYC and other compliance related activities? Can MF scheme portfolios and factsheets get constructed automatically and available with real time updates? How can regulators and auditors have easy access to information as and when they want? Finally, we will examine some of the challenges or hurdles that come in way towards the implementation.

Keywords: Blockchain, Mutual Fund, Asset Management, Smart Contract, Consortium Blockchain, KYC

JEL Classification: O31, G14, G20

Suggested Citation

Manda, Vijaya Kittu and S.S., Prasada Rao, Blockchain Technology for the Mutual Fund Industry (November 1, 2018). National Seminar on Paradigm Shifts in Commerce and Management 2018 in Congruence with Block Chain Accounting. (pp. 12-17), 2018. Available at SSRN: https://ssrn.com/abstract=3276492 or http://dx.doi.org/10.2139/ssrn.3276492

Vijaya Kittu Manda (Contact Author)

Gandhi Institute of Technology and Management (GITAM), Institute of Management ( email )

Rushikonda
Gandhi Nagar
Visakhapatnam, 530045
India
+919849519188 (Phone)

Prasada Rao S.S.

GITAM University, Visakhapatnam - Department of Finance ( email )

Visakhapatnam, Andhra Pradesh
India

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