“This is the first glimmer, you can see the light at the end of the tunnel,” says DTCC digital assets chief Nadine Chakar, on stage in Frankfurt on Monday afternoon together with Chainlink co-founder Sergey Nazarov. A combination of blockchain “consensus” logic to establish truths, with ISO 20022-standardised messages to get them out to stakeholders without distortion, is gaining traction among large financial market infrastructures and market participants.
Convinced that blockchain technology, over time, will offer both cheaper and simpler solutions for a large part of the core processes in the finance industry, Chainlink’s Sergey Nazarov suggests that DLT should not be seen as an alternative to today’s financial services but rather as an integral next step in how to run an existing business going forward. Chainlink, roughly speaking, offers financial institutions an interface towards blockchains, letting them access a broad range of new ledgers while continuing to work in the ways they already do.
Monday’s Sibos session in Frankfurt – featuring Nazarov in dialogue with Nadine Chakar, Global Head of DTCC Digital Assets – encompassed both an outlook at the potential for blockchain-based solutions across finance in general, and a deeper look into the example of corporate actions data, an area where an ongoing project with many industry participants is considered successful so far.
“Technically we’ve been able to prove a lot of things,” says Nadine Chakar on stage, going on to list some. “I am excited that we were able to demonstrate that the combination of artificial intelligence and digital technology are a very potent combination; we’ve been able to show that you can take some level of institutional know-how, code smart contracts, and be able to perform some corporate action activity; … we’ve been able to do it cross-chain, which is really important. This is the beginning of a long, arduous road, if you will, to get us there because unfortunately, corporate actions are complex. If they were not, we would have solved this a long time ago. There are over 60 to 70 different permutations of how we do things, so data collection is a massive step, trying to automate it is another. And now, hopefully, we’ll be able to focus our attention on how you institutionalise it, how do you incorporate that into workflows? But most importantly, we still need to give some thought to the risk assessment process, how do we incorporate that into our workflows? And listen, if you guys have been around as long as I have, you take this with a grain of salt. As an industry, we have tried many, many, many times to solve this. But I think this is the first glimmer, you can see the light at the end of the tunnel, and it’s not a train. So, we know there’s a path, and we’re very excited to have contributed with that, with all the great [project participant] names.”
A corporate action, such as a dividend, triggers a reaction through the chain from the corporation to the investor, possibly via the central securities depository and one or more custody banks to each investor. The risk elements are ubiquitous, mistakes potentially costly, and standards lacking.
“Anybody who has worked in financial services operations will tell you that the life of a corporate action manager is not a bed of roses,” says Nadine Chakar. “So the ability to try to find a solution is really exciting. This is not our first rodeo; as an industry, we have been trying for decades to find a way to consolidate and automate the data. We are not yet at a stage where you can set and forget it, but the blockchain, smart contracts, and oracles, have given us a path, if you will – a better shot than we’ve ever had.”
Sibos 2025 plays out in Frankfurt from 29 September to 2 October, with about 12,000 registered delegates. We are there, overview our coverage here.
