The industry initiative brings together leading financial and market infrastructures, Euroclear and Swift, along with some of the world’s largest financial institutions, including UBS, Franklin Templeton, Wellington Management, CACEIS, Vontobel, and Sygnum Bank.
SAN FRANCISCO, Oct. 21, 2024 /PRNewswire/ — Chainlink announced today the results of an industry initiative that harnesses the combined advancements in AI, oracles, and blockchain technology to address the lack of real-time and standardized data around corporate actions. This initiative brings together financial and market infrastructures Euroclear and Swift, as well as major financial institutions including UBS, Franklin Templeton, Wellington Management, CACEIS, Vontobel, and Sygnum Bank.
Along with these market participants and three blockchain ecosystem partners—Hyperledger Besu, Avalanche, and ZKsync—the initiative successfully demonstrated how Chainlink decentralized oracles can be used in combination with large language models (LLMs) to validate and deliver critical financial data onchain. The specific LLMs used included OpenAI’s ChatGPT 4o, Google’s Gemini 1.5 pro, and Anthropic’s Claude 3.5 sonnet. Chainlink’s Cross-Chain Interoperability Protocol (CCIP) was then used to securely move the onchain corporate actions data across various public and private blockchains.
Current inefficiencies in corporate action processes cost regional investor, broker, and custodian businesses approximately $3-5 million each annually, with 75% of firms re-validating custodian and exchange data manually. These issues stem from inconsistencies in structure, format, terminology, timeline, medium, and data standards for dissemination. This industry-wide initiative with Chainlink introduces a novel solution using Chainlink oracles, which provide a unified golden record around corporate actions data that is accessible in real-time. This approach mitigates the need for manual reviews and enables all participants, from custodians to asset managers, to have near-instant access to accurate and standardized data.
The initiative successfully demonstrated how LLMs can be used in combination with Chainlink for near real-time data distribution of corporate actions events across three blockchain networks. With its novel approach of an interoperable, unified golden record, the initiative marks a significant architecture milestone in the ongoing journey to transform the management and dissemination of corporate actions data.
“The combination of AI and oracles is a powerful tool for taking corporate actions data and turning it into highly reliably structured data. Turning various pieces of disconnected corporate actions data into unified golden records that can then be relied on by hundreds of market participants as a definitive, single source of truth is truly a huge step forward in how financial markets deal with critical and error-prone data. Solving this problem creates a lot of advantages for asset managers, banks, and financial market infrastructures to all be in sync many times faster than today, at a fraction of the cost, and with a massive reduction in costly errors that affect the financial system.” — Sergey Nazarov, Co-Founder of Chainlink
“By collaborating across the industry and leveraging cutting-edge technologies, we can address major pain points and redesign workflows for greater efficiency, transparency, and value. With proper implementation, co-creation allows AI and DLT to amplify each other’s strengths, creating golden records accessible to all in real time and paving the way for transformative solutions.” — Stéphanie Lheureux, Director Digital Assets Competence Center, Euroclear
“The complexity of corporate actions is a relevant and appropriate use case for the convergence of AI, oracles, and blockchain technology. By leveraging AI and Chainlink oracles to interpret, standardize, and deliver high-value unstructured data, we can dramatically reduce the manual processes required, enabling significant potential operational efficiency and cost reduction while ensuring that data flows through the system with the required levels of accuracy and transparency.” — Mark Garabedian, Director, Digital Assets & Tokenization Strategy, Wellington Management
“CACEIS fully supports industry efforts to create a blockchain-based ‘golden source’ of information to streamline corporate action management with data distributed in real time to all market participants. A shared data framework optimises existing operational processes, reduces error rates, and prepares the ground for further innovation in the field of asset tokenisation. Being at the cutting edge of technologies like AI, machine learning and DLT is key to CACEIS’ future service development and our IT investment strategy reflects that.” — Younes Ayouaz, Group Head of Project & Transformation – Custody and Cash Clearing Business Unit at CACEIS
While corporate actions are the first use case, unified golden records can also be applied to the valuation of private assets, risk management data, legal identifiers, security-level data, and more. The next phase of this initiative will use established Swift messaging standards to make onchain unified golden records interoperable with and consumable by existing mission-critical portfolio processing and management systems utilized by financial institutions.
Read the full report: Transforming Asset Servicing With AI, Oracles, and Blockchains.
Chainlink
Chainlink enables financial institutions to develop customized, compliant, and future-proof blockchain applications and tokenized assets. Chainlink has securely enabled over $16 trillion in transaction value and delivered more than 15 billion verified messages onchain across the blockchain ecosystem. Major market infrastructure providers and institutional banks have collaborated with Chainlink to successfully demonstrate how financial institutions can use existing infrastructure and messaging standards to interact with tokenized assets across any blockchain.
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SOURCE Chainlink
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