A pan-European fund record-keeping platform launched today, courtesy of London-based blockchain settlement system developer SETL Development Ltd.

With the platform, named IZNES, firms will be able to enter new relationships with investors, manage the Know Your Customer processes required by financial regulatory bodies, handle subscriptions and redemptions, settle transactions and manage assets. It represents a collaboration between SETL and four asset management firms: OFI AM, Groupama AM, La Financière de l’Échiquier and Arkéa Investment Services. These groups joined in the initial version of the platform in July and have been involved in the validation process of the technology.

Pierre Davoust, chief executive of SETL France, said he believes that IZNES will “revolutionize the fund industry in Europe and bring substantial benefits to asset management firms as well as investors and their intermediaries.”

Davoust described the development of IZNES as the result of “an alignment between the strong demand from asset management firms” that want a way to establish simple, effective investment relationships. He figured blockchain was the cutting-edge technology that would embody that task.

Using cryptographic distributed ledger technology, or blockchain technology, the IZNES platform employs a design that reduces transaction costs, increases transparency and optimizes operational workflow. It does this by allowing each institution involved in asset exchange and management to maintain its own copy of the ledger which cryptographically self-verifies with other copies after each transaction recorded.

IZNES relies on a proprietary permissioned blockchain developed by SETL named OpenCSD. OpenCSD is a financial services ready platform designed for financial technology institutions that can handle mutual funds, private equity, cross border transactions and commercial invoices. SETL touts it as a richly featured system that takes into account a multitude of aspects needed for financial transactions, such as identity management, a payments system, secure messaging and a responsive, high-capacity network capable of billions of individual transactions a day.

Launched in 2015, SETL raised $39 million in a Series A funding in July 2016. In December, it got an undisclosed amount from financial risk management and consulting firm Deloitte Touche Tohmatsu Ltd.

Deloitte and SETL teamed in November to build out and test a joint system based on Deloitte’s blockchain identity management platform and OpenCSD. The system was tested and verified by 100 Deloitte employees using contactless blockchain cards for merchant transactions. The financial firm also rolled out a blockchain for investment funds reporting in February in conjunction with the Irish Funds Industry Association.

According to a report from PricewaterhouseCoopers LLP, over $1.4 billion in investments went into blockchain startups over a period of nine months during 2016. A report from Business Insider Intelligence in March cited that most banks are exploring blockchain technology to streamline processes and cut costs – but that the most successful solutions would solve specific problems.

SETL’s platform falls into a category of blockchain initiatives seen across the industry that uses the technology to ease problems generated by excessive paperwork and hard-to-verify communications. It competes with platforms developed for a similar purpose such as IBM Corp.’s Blockchain based on Hyberledger Fabric, PricewaterhouseCoopers’ Vulcan Digital Asset Services and blockchain financial technology solution provider Chain Inc.

Image: WerbeFabrik/Pixabay