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Lysis, a leader in business change management services and a provider of innovative CLM and KYC consultancy and services, today announces their contribution to a Report that includes comprehensive research on the application of Distributed Ledger Technology (DLT) to the buy-side. The report was published on 23rd January.
“Distributed Ledger Technology – An Emerging Consensus on the Buy-Side” articulates a convergence of views among buy-side participants, and identifies the specific benefits that DLT can bring to asset managers and asset owners. The report captures the optimism of DLT and Blockchain, but also highlights the dependency of asset managers and owners on their service providers, platform providers and regulators: it asserts that their constructive support will be key in facilitating, accelerating and maximising buy-side benefits, and it identifies the main components of that support.
While many asset managers have been slow to engage with Distributed Ledger Technology, the research shows that its benefits are widely recognised across the buy-side: very material cost savings are increasingly seen as attainable, improvements in data and risk management are viewed as realistic, and some areas of revenue enhancement are becoming recognised as targets for the technology. To enable their partners to support them in achieving these benefits, asset managers need to articulate their priorities and preferred development directions very clearly; collaboration between managers will be key to the emergence of a coherent set of industry initiatives.
The report makes it clear that the buy-side need to take control of DLT initiatives, and shape them for maximum value to asset owners. The buy-side’s traditional dependence on the sell-side to take a lead in innovation will not work for DLT, where key benefits to the buy-side accrue from the shortening of the investment value chain. While there is scope for collaboration in some areas, in others there is a divergence of interest between the buy- and sell-sides which makes dependence impractical.
The consensus is based on research carried out in 2017, and wraps in Asset Managers, Vendors, FinTechs, Service Providers and Consultants. The report is co-authored by Dr Ian Hunt and Chris Mills, both well-known industry consultants heavily involved in Blockchain and DLT.
The report is a significant milestone in the industry’s development of Blockchain, as it is the first time that such a range of buy-side participants have contributed material and review to a single study. The report is supported by both the Investment Association (IA) and the Alternative Investment Management Association (AIMA), and is sponsored by M&G Investments, Linedata and Insight Investment. It has been peer-reviewed over multiple iterations by Lysis, alongside some of the largest investment managers, sell-side service providers, buy-side vendors and wider FinTech specialists.
The IA is planning to hold a launch event for the paper on February 6, while Microsoft and IBM are hosting conferences on its findings in March and April respectively.
Jon Sweet, CEO of the Lysis group of companies, said: “At Lysis we focus on providing the best solutions and services in Client Lifecycle Management and KYC. We clearly see the potential benefit that Blockchain and Distributed Ledger technologies can bring to our proposition, and we are determined that our clients should benefit from the transformational innovation which they can enable. Further, we see that DLT offers the prospect of a commoditisation of services, which will allow us to deliver to the buy-side in a very cost effective way, allowing us better to serve a wider range of clients. We are delighted to have been involved in a seminal work which will accelerate the engagement of the buy-side with the new technology.”
Report co-authors Dr Ian Hunt, industry consultant and Chris Mills, Managing Partner at Fimatix, said: “The Buy-Side needs to wake up to the potential of Distributed Ledgers and Blockchain, clearly prioritise the most relevant and achievable benefits, and drive the developments that deliver those benefits. This means being very clear with Service Providers, Vendors and Regulators about what we need from them to facilitate and accelerate benefit delivery. We are very grateful to Lysis, as reviewers of and contributors to the Report, for supporting the development of a Buy-Side consensus, and for helping to bring DLT to the fore as a transformational technology for the Buy-Side.”
The full report can be found here.
