In a groundbreaking initiative, Chainlink has partnered with major financial institutions and market infrastructures to tackle one of the financial industry’s most pressing challenges: the management and dissemination of corporate actions data. This collaboration includes notable entities such as Euroclear, Swift, UBS, Franklin Templeton, Wellington Management, CACEIS, Vontobel, and Sygnum Bank, and aims to leverage cutting-edge advancements in artificial intelligence (AI) and blockchain technology to create a unified solution for unstructured data.
Addressing the Unstructured Data Challenge
Current inefficiencies in corporate action processes lead to substantial annual costs for regional investors, brokers, and custodians, estimated between $3-5 million each. A staggering 75% of firms still rely on manual re-validation of custodian and exchange data, which is fraught with inconsistencies in structure, format, terminology, and timelines. Recognizing the urgent need for reform, Chainlink’s initiative seeks to create a standardized, real-time data framework that all market participants can access.
The initiative demonstrated how Chainlink’s decentralized oracles can be integrated with large language models (LLMs) like OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude to validate and deliver corporate actions data on-chain. By utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP), the initiative allows for the secure transfer of corporate actions data across various public and private blockchains.
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The Power of AI and Oracles
Sergey Nazarov, co-founder of Chainlink, highlighted the transformative potential of combining AI with blockchain oracles. “Turning various pieces of disconnected corporate actions data into unified golden records that can be relied on by hundreds of market participants is a huge step forward. Solving this problem creates advantages for asset managers, banks, and financial infrastructures to all be in sync faster, at a fraction of the cost, and with a significant reduction in errors,” he stated.
The integration of AI not only streamlines the data process but also enhances the accuracy and reliability of corporate actions information, which is essential for maintaining trust in financial systems. As the initiative progresses, its success in corporate actions could pave the way for similar applications in asset valuation, risk management, legal identifiers, and security-level data.
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Industry Perspectives
Stéphanie Lheureux, Director of the Digital Assets Competence Center at Euroclear, emphasized the importance of collaboration in overcoming industry challenges. “By leveraging cutting-edge technologies, we can redesign workflows for greater efficiency and transparency. Proper implementation allows AI and DLT to amplify each other’s strengths, creating golden records accessible to all in real-time.”
Mark Garabedian, Director of Digital Assets & Tokenization Strategy at Wellington Management, noted, “The complexity of corporate actions is a relevant use case for the convergence of AI, oracles, and blockchain technology. This integration dramatically reduces the manual processes required, enabling significant operational efficiency while ensuring data accuracy.”
Younes Ayouaz, Group Head of Project & Transformation at CACEIS, expressed support for establishing a blockchain-based “golden source” of information to streamline corporate action management. He underscored the importance of being at the forefront of technologies like AI and DLT for future service development.
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Looking Ahead
As the initiative continues to evolve, it plans to utilize established Swift messaging standards to ensure that these on-chain unified golden records are interoperable with existing portfolio processing systems used by financial institutions. This next phase could further enhance the accessibility and utility of standardized data across the financial landscape.
Chainlink is well-positioned to lead the charge in this transformation, having already secured over $16 trillion in transaction value and delivering more than 15 billion verified messages across the blockchain ecosystem. With the ongoing collaboration of key market players, Chainlink is not just addressing the unstructured data challenge; it’s redefining how corporate actions data is managed and utilized in the financial industry.
In conclusion, this innovative initiative promises to enhance efficiency, reduce costs, and improve data integrity, paving the way for a more transparent and reliable financial ecosystem. As Chainlink and its partners work together, the impact on corporate actions and beyond could be profound, setting new standards for data management in the financial sector.
