BNP Paribas Securities Services, a leading global custodian, and SmartAngels, the leading direct investment platform, have recently taken a major step forward in crowdfunding history by signing a strategic partnership for the use of Blockchain technology. The partnership will allow private companies to issue securities on the primary market and give investors access to the secondary market using Blockchain technology.
“By applying Blockchain technology in the crowdfunding sector, we will accelerate cash and securities flows by using e-certificates, and make them more secure. This is a major innovation for the custody and account-keeping of unlisted securities. It also provides BNP Paribas Securities Services with the opportunity to test a solution that could be applied to listed securities markets. The use of Blockchain is part of BNP Paribas’ digital strategy,” said Philippe Ruault, Head of product for clearing, custody and settlement at BNP Paribas Securities Services.
BNP Paribas Securities Services is developing a share register that uses the Blockchain protocol, which will automatically register financial securities issued by SmartAngels’ client companies. Investor payments will be processed immediately and e-certificates will be issued to them straight away. Therefore, financial transactions made via the platform will be performed simply, quickly, securely and for a lower cost.
In a sector that is seeing sharp volume growth, SmartAngels’ clients will benefit on two levels. The solution will standardize the securities registration process, providing investors with additional IT and trade processing security. At the same time, the Blockchain platform operated by BNP Paribas will simplify the management of shareholders for issuers.
The standardization of transactions and the enhanced security provided by BNP Paribas Securities Services will also allow investors to trade their shares directly on the SmartAngels platform, creating a secondary market for companies registered with the platform. This will make crowdfunding investments much more liquid – an issue not given much attention in this sector until now.
Meanwhile, the Bank of Ireland, in collaboration with services firm Deloitte has successfully completed a joint proof-of-concept blockchain trial.
According to the bank, the successful trial demonstrated the means for distributed ledger technology to enable banks to combine the innovation, with existing banking systems.
The trial combined synthetized data from multiple systems in BOI’s Global Markets division. The data and its associated functions successfully formed an “immutable, distributed, searchable repository of information” visible across the entire trade cycle. Clients, relationship managers and regulators also took part in the trial, with their ability to view and conduct real-time auditing of transactions through a browser-based user interface.
“BOI is constantly investigating how technology and innovation can improve the customer experience, while also ensuring that systems and procedures address changes in regulatory requirements being introduced across Europe,” said David Tighe, head of innovation at Bank of Ireland.