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Can Blockchain be a potential Game changer for the Stock Trading Industry?

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Blockchain for Trading Industry

Blockchain technology for Trading Industry

The Blockchain has certainly been the most talked about technology in the recent past, which was originally developed for digitizing and decentralizing the currency (bitcoin) by means of distributed ledger system. The technology is certainly not limited to digital currency, experts are now validating its application in areas such as shipping, supply chain, cross-border Trade Finance etc.

In December 2015, the Linux Foundation announced the creation of the Hyperledger Project. The objective of the project is to advance cross-industry collaboration by developing blockchains and distributed ledgers, with a particular focus on improving the performance and reliability of these systems.

Some of the early and prominent members from the financial sector of the initiative include J.P. Morgan, State Street, Wells Fargo, BNY Mellon etc

Can Blockchain technology be beneficial to the Trading Industry?

So, the imminent question in everyone’s mind right now is, can Blockchain technology be a game-changer for the stock broking industry?  Well, if we look at the Trading lifecycle especially the Post-Trade settlement, the process is broadly classified into the following steps

  • Comparing trade details of Buyer and Seller
  • Approval of the transaction
  • Change in records of ownership
  • Transfer of securities and cash.

This process takes around 3 days to complete a transaction, primarily due to the role of intermediaries, operational trade clearance and regulatory processes.

The use of Blockchain can potentially bring down the time required for the settlement process from days to minutes. This can reduce the cost drastically as trades are settled by peer confirmation. In this case there is no need for a clearing house, auditors to verify trades and custodians to ensure a fund has the shares they say they hold. Essentially, this is cutting out the middleman in the back office which means less costs in record keeping and in turn less overall cost of transactions.

Recently, SEBI has appointed the Committee on Financial and Regulatory Technologies (CFRT), for exploring the possibilities that blockchain platform has to offer, which has been making waves in the areas of fundraising and post-trade settlement.

The Front-Runners

nasdaq

Japan’s Financial Services Agency has allowed the Tokyo Stock Exchange, to use blockchain as its core trading infrastructure. Japanese brokerages have reportedly initiated a consortium, which is dedicated to hoisting the process of blockchain technology adoption, the founding members were organizations like Rakuten Securities, SBI Securities, Daiwa securities and Nomu.

Back In 2015, Nasdaq has unveiled the use of its Nasdaq Linq blockchain ledger technology which allows private companies not listed on a stock exchange to digitally represent their share ownership. Linq and blockchain provider Chain have successfully completed and recorded private securities transactions.

About Market Simplified: Market Simplified is a thought leader in revolutionizing and digitizing products for financial institutions by continuously innovating and simplifying finance. We empower our customers with a cutting-edge digital experience that is highly personalized and enhanced for the end users with our ‘Experience Engineering’ platform driven by Analytics, AI, Machine Learning and Blockchain technologies. Our clientele includes industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank, National Stock Exchange of India and many others across the globe.

About The Author: Shashidhar is currently working as a Manager-Key Alliances in Market Simplified India Ltd.

 

5 Exciting Use Cases Of Blockchain In Financial Services

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BlockchainOne of the most trending topics in the Fintech industry is Blockchain. We touched upon a few points that enable a better understanding of the technology and how to use it in best possible ways?

What is blockchain?

Blockchain, is a digital, distributed transaction ledger with identical copies maintained on each of the network’s members’ computers. All parties can review prior entries and record new entries as well. Transactions are classified and grouped into blocks and recorded one by one in a chain of blocks. Cryptography protects links between blocks and their content, so that prior transactions can neither be destroyed nor forged. This technology is decentralized which means there is no central authority in this transaction network. 

According to PWC’s ‘Global FinTech Report 2017’, 77% of financial companies plan to adopt block chain as part of their production system or process by 2020. By identifying this huge potential in blockchain, technology start-ups are investing in this space.


Total Investment in Blockchain Startups

Top 5 Use Cases of Blockchain:

1. Share Trading

Blockchain will have a great impact on share trading. Implementing this technology helps in increasing greater trade accuracy and a shorter settlement process through automation and decentralisation.

2. Cross-Border Payments

The transfer of value has always been a costly and time consuming process. This is particularly true in case of cross-border payments. Blockchain technology reduces the cost and makes the process efficient in a simple way.

3. Smart Contracts

One of the most important applications of this technology is the smart contract. It automatically executes commercial transactions and agreements. It also fulfils the obligations of all parties in a contract – without increasing the expense for the middleman.

4. Loyalty & Rewards

This technology offers many advantages, like traceability of transactions and transparency. This will help financial institutions and insurers to create a more captivating loyalty and rewards program that provide 24/7 performance management and enhances engagement.

5. Identity Management

When identity management is transferred to blockchain, users will be able to choose how to identify them and who will be informed. They still need to register their identity, but after that, they can re-use that identification for other services.

About Market Simplified
Market Simplified is a thought leader in revolutionizing and digitizing products for financial institutions by continuously innovating and simplifying finance. We empower our customers with a cutting-edge digital experience that is highly personalized and enhanced for the end users with our ‘Experience Engineering’ platform driven by Analytics, AI, Machine Learning and Blockchain technologies. Our clientele includes industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank, National Stock Exchange of India and many others across the globe.

About The Author: Krishna Kartheek Palchuri is currently working as a Business Development Executive in Market Simplified India Ltd. He finds his solace on the roads travelling to distant places over his bike. Also a foodie who loves to experiment with the different tastes which new places get to offer him.

Yahoo in line with Google

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Yahoo is following in footsteps of Google. If you are thinking in terms of ‘search engine’ then you are mistaken, Yahoo is following Google in its footsteps of online advertisements. Yahoo is trying to woo the media network by coaxing them to sell major part of their primetime shows on onlin-video which would help them to increase their reach as well as their revenues. At present the online ad spending is small but is growing at an enormous number and is sure to meet its. Now the media network are beginning to see how video advertisement can help their business and Yahoo is trying to woo these potential advertisers. Let us see if Yahoo makes a mark and succees like Google as far as online advertisements are concerned.

Foes Become Partners

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You people must have heard the news about Microsoft and Novell joining hands together to provide the optimum Customer service. Well as far as I can understand it is coming together of properitory Operating System and Open Source code to provide the optimum benefit for both the Microsoft users and that of Suse Linux. Ballmer and Hovespian (CEO of MS and Novell resp.) have reiterated the fact that the coming togther of two different type of software was to help the customer to have a better choice.

If you ask me it brings advantages in the form of expanding research facilities, using each others technical expertise, cutting down cost, and of course to create a large niche market for both the products.

The Software giants seems to have made their goal to reach compatiability with each others products, apart from research on virtualisation and web services.

I feel this is one strategic move where both the software giants have come together to achieve a common goal of expanding each other markets and to bring down the overall cost. Well I think when the goal is the same foes eventually turn into friends.

IBM takes over ISS

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Guess you must know about this takeover, but let me give some details, The entire deal cost IBM about 1.3 million dollars. ISS and IBM have been working together since 1999 and the decision about the merger came on August 23 this year. ISS also known as the Internet Security System is incharge of internet security systems and also undertakes early detection and monitoring.

IBM is all prepared to merge both product of IBM and that of the internet security system. Now guess what, as consumers we would have the dual advantage of enjoying the IBM product as well as the security services of ISS. My guess is that IBM is taking advantage of this scenario is bound to come up with products which would be a merger of high resolution and impeccable security system too. Now that is what we are waiting for. Well let us see what this merger does for IBM market!

Oracle realises importance of Partners.

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Oracle is now all set to bring an all round revamped website which would promote third party applications. As well as other offerings from its partners. This effort is to straighten its relationship with its partners, which have not been very smooth in the previous years. This strategy was already adopted by IBM and Microsoft to strengthen their relationship with their partners. Needless to say that Oracle earns about 44% of its revenue from its partners.

Oracle will also try to include its partners into more of its activity. One example is the ‘Oracle’s world OpenWorld conference which will see more of Oracle partners participating in the event.

Casual Labourers

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We have heard about flexi working hours, but anyone heard of casual working. Well those are the new breed of enterpreuners. They are know to do odds and ends of internet jobs and guess what they are paid instant cash through debit cards. This innovative new technique is done by a company called chacha search. Chacha search employs laboureres who are specialist in particular topics. The wages earned by chacha are instantly dumped in a debit card, which can be tracked and accessed by the workers and who can use the cash immediately. This is a new innovative technique for all those stay at home or freelance specialist. Chacha search charimat Scott A jones think this new innovative technique helps people to work and earn howmuch ever they want or are their requirement. Guess the mantra for this new technique would be ” you work, you earn”

Once Bitten, Twice Shy

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If you are thinking that everything looks quite peaceful at the Microsoft front then you are quite wrong. Microsoft is all disturbed at being delayed in the launch of the new Vista version. The European Union Regulatory board has found some flaws in the security part of the Vista range of software and feel that the consumer’s are not given enough of advantage due to the security features in the software. Anyways the EU feel that they cannot be blamed for delaying the release, as they have provided a detailed list of ‘areas of concern’ to Microsoft in early July itself. Well Microsoft has already been bit by the anti monopoly campaign and was fined as much as €497 million. Well this time MS is not taking anychances and wants to do everything according to the ‘book’ even if it means delayed release of its new version of Vista. Well it is quite apt to say here that ‘Once Bitten, Twice Shy’

Alliance between Intel and Google

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If you people out there are thinking, that there is no much news about alliances, then here is the news. Eric. E. Schmidt might be joining Apple Board. Apart from the similarity that both the companies are forerunners in Silicon Valley, Eric E. Schmidt and Steven P. Jobs, Co Founder of Apple have one more thing in common, that is their rival Microsoft. If sources are to be believed then, Schmidt is interested in developing ‘web based’ technology, which could prove to be a stiff competition to Microsoft. Apple Macintosh recent alliance with Intel goes to show that it is trying to build a better market than Microsoft. One has to see what the alliance between (if it happens) Apple and Google might spark…so people get ready for more fireworks from Google.

IBM has acquired ISS

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IBM has acquired Internet Security System Inc. by spending about $1.3bn. IBM is on a drive to spend about $3.6bn to acquire new services and infrastructure, which may revive its ongoing ‘slump’ in growth. ISS in other words may help IBM to had ‘security management’ as on of its various branches of services. By acquiring ISS, IBM has joined the competing array of Symantec Corp, CA Inc., and EMC Corp. Such an acquisition only goes on to show that IBM is trying to stabilise its growth by branching itself into various products and services. And Security Management is one of the critical area, where most of the large companies are at the movement concentrating. Security Management has become an area of concern and importance. Large players to create a niche in the market for themselves are absorbing many of the smaller players. Well one needs to wait and watch, as to how this new acquisition will help the growth graph of IBM?