Capital Market Case Study: ‘Smart’ Funds
How Is STACS Blockchain Technology Solving Pain Points and Creating Opportunities?
Pain Points
Manual and inefficient fund distribution processes:
- Subscription
- Redemption
- Dividend Payout
Structural industrial headwinds are faced:
- Low-return environment
- Fee compression
- High regulatory compliance costs
Slow onboarding experiences due to lengthy and repetitive investor suitability processes:
- Unsatisfactory client experiences
- High onboarding costs faced
STACS Opportunities
Highly automated fund processes will result in speed-to-market for fund launches, efficient fund distribution, wider investor participation in voting, and more accessible investor visibility of asset holdings.
Expansion into new markets by tapping into a global network
(ie. “Global STACS”)
A shorter onboarding experience brings about better client experiences, client retention and lower onboarding costs:
- Eliminate repeated KYC processes
- Expand into Digital IDs: Storing information regarding investor suitability as “Digital Fingerprints”
How will STACS Blockchain impact investment management?
Mutual funds, real estate funds, venture capital firms, private equity firms, and specialty markets are facing compressing margins, demands to improve liability risk management, pressures to adapt more dynamic decision-making structures and to address the increasing complexity of regulations.
STACS Blockchain effectively streamlines asset management:
- Streamlined fund launch
- Seamless stakeholder engagement with digitised assets and services
- Digitisation of portfolio and existing holdings for wider market access, liquidity and fractionalisation
- Customisable built-in privacy settings for transaction confidentiality
- Voting and other shareholder rights and obligations programmed into digital assets, resulting in seamless user experience and reduced risks of human error
- Creation and enforcement of mechanisms to adhere to Shariah-compliant activity for Islamic Finance
- Improved governance and transparency for investors and stakeholders
- Efficient cap table management
- Streamlined fund administration
- Streamlined transfer agency in asset management
The STACS blockchain brings industry participants onto a single network to interact and transact in near real-time:
Smart contracts can manage certain fund administration tasks such as investor suitability tests during onboarding period. Modular solutions can also integrate with existing trade/order processing and routing methods, for record management in an immutable database.
By having the visibility of these traditionally-siloed tasks on a single source of truth, it mutualises the shared information among relevant participants.