Wall Street’s structured finance companies want to use Blockchain’s immutable shared ledger to lower their cost of operations and thus boost their profitability.
In efforts aimed at tapping the revolutionary benefits of blockchain technology for the fintech industry, Wall Street’s lobby group for structured finance companies is exploring ways to collaborate with the blockchain industry so as to tap the $1.9 trillion U.S. securitization market.
Their partnership, which is to be announced later on Monday, will see the coming together of the Structured Finance Industry Group and the Chamber of Digital Commerce for working on research and other projects.
This significant development kicks off the publication of a study which scrutinised ways to deploy blockchain’s distributed ledger technology so as to simplify the securitization market, which despite its humongous size has remains opaque, highly manual and thus labour intensive.
According to the study, done by Deloitte, blockchain technology could ease and bring confidence to the certainty of securitization transactions and help improve market transparency, all of which is will ultimately result in better liquidity.
Blockchain technology allows for an undisputable shared ledger for transactions and is maintained by a network of computers rather than one central authority, as is done traditionally. It can not only minimise errors but also reduces the need for reconciliation.
Of late, financial institutions have been ramping up their investment in blockchain technology so as to make some of their processes more efficient and in the process generate more profit.