Distributed Ledger Technology
Distributed Ledger Technology (DLT, aka blockchain) lends itself to situations where many different entities participate in complex interactions or transactions.
- Trade finance.
- Insurance claims processing.
- Complex OTC instrument creation.
- Securities transaction settlement.
- Shareholder voting.
Traditionally one entity would act as the record keeper, keeping track of all interactions / transactions. In many cases, multiple entities act as record keepers and have to reconcile their information with each other.
The traditional approach has disadvantages.
- Reconciling information among multiple record keepers can be a nightmare.
- Not all entities have a complete view, i.e., access to all of the information.
- The integrity and ‘auditability’ of the information is dependent on the system(s) used by the record keeper(s).
Shareholder Voting Challenge:
The National Settlement Depository [NSD], the central securities depository in Russia and a part of the Moscow Exchange Group, needed to collect proxy votes from numerous shareholders in disparate geographies. Traditional paper based ballots were cumbersome, time consuming and difficult to audit.
DataArt’s award winning DLT team delivered one of the first fully automated blockchain-based shareholder voting platforms.
- NSD notifies a network of local depositories and shareholders of an upcoming vote through instant cascade messaging. All messages are ISO 20022 compliant.
- Shareholders vote through local depository websites. These depositories submit the votes cast to the e-voting system. Shareholders and depositories apply digital signatures to execute each action.
- The platform assigns an identification number to each vote and delivers information about the votes back to NSD.
- After the voting process ends, the system calculates results automatically.
- Streamlined transparent processes and operational costs reduction for both NSD and end users (no paperwork, no ‘traditional’ postal services, no human factor) .
- Significantly reduced voting timeframe — from as long as one month to days or even hours.
- NSD achieved first mover advantage in automated settlement voting, enhancing their competitive positioning.
- The NSD service became more attractive for foreign investors and encouraged greater interest in the Russian market.
- By using DLT, any data that has been uploaded to the network is safe from falsification. Cryptography is also employed to guarantee the integrity of the voting process.
Insurance Claims Processing Challenge:
A global insurance firm wanted to streamline the process of managing complex claims involving multiple external business entities. Each step of the claims assessment process involves extensive manual intervention and cross-firm coordination.
DataArt’s award winning DLT team delivered a platform that streamlines the process by connecting the entire network of entities while keeping the data exchange secure and private. The system incorporated SmartLedger technology to speed time to market.
- Quicker processing — multi party transactions happen in real time.
- Transactions recorded are immutable and fully auditable.
- Parties can collaborate based on a single and consistent trail of events and transactions.
- Compared to highly automated databases, Smartledger brings more trust to the communication as nothing in the data can be changed without the approval of the counterparty.
- Reduced expense, errors and risk (any claim wrongly adjudicated could lead to a potential lawsuit).
- Platform is a strong foundation for additional functionality and a surrounding ecosystem.