Revolutionizing Corporate Actions: AI, Oracles, and Blockchain Convergence

In a groundbreaking industry initiative, leading financial and market infrastructures, Euroclear and Swift, have joined forces with some of the world's largest financial institutions, including UBS, Franklin Templeton, Wellington Management, CACEIS, Vontobel, and Sygnum Bank, to address the longstanding challenges surrounding corporate actions data. This collaborative effort harnesses the combined advancements in AI, oracles, and blockchain technology to deliver a transformative solution that promises to streamline and standardize the management and dissemination of this critical financial information.

Unlocking Efficiency and Transparency in Corporate Actions

Tackling the Challenges of Unstructured Data

The current landscape of corporate actions data is fraught with inefficiencies, stemming from inconsistencies in structure, format, terminology, timeline, medium, and data standards. These issues have long plagued the industry, costing regional investor, broker, and custodian businesses an estimated $3-5 million annually, with 75% of firms manually re-validating custodian and exchange data. This industry-wide initiative, led by Chainlink, aims to address these pain points by leveraging the power of AI, oracles, and blockchain technology.

Introducing the Unified Golden Record

At the heart of this groundbreaking initiative is the creation of a unified golden record for corporate actions data. By combining Chainlink's decentralized oracles with large language models (LLMs) from industry leaders like OpenAI, Google, and Anthropic, the initiative has successfully demonstrated the ability to validate and deliver critical financial data on-chain in near real-time. This approach not only mitigates the need for manual reviews but also enables all participants, from custodians to asset managers, to have immediate access to accurate and standardized data.

Transforming Asset Servicing with Blockchain Interoperability

The initiative has also leveraged Chainlink's Cross-Chain Interoperability Protocol (CCIP) to securely move the on-chain corporate actions data across various public and private blockchains. This interoperable approach marks a significant milestone in the ongoing journey to transform the management and dissemination of corporate actions data, paving the way for a future where financial institutions can seamlessly access and utilize this critical information.

Unlocking the Potential of AI and Oracles

The combination of AI and oracles has proven to be a powerful tool for transforming corporate actions data into highly reliable, structured information. By leveraging the capabilities of LLMs to interpret and standardize the various data sources, the initiative has created a definitive, single source of truth that can be relied upon by hundreds of market participants. This innovation not only reduces costly errors but also enables financial institutions to achieve greater efficiency, transparency, and value in their asset servicing operations.

Expanding the Scope: Beyond Corporate Actions

While corporate actions are the initial focus of this industry-wide initiative, the potential applications of unified golden records extend far beyond this use case. The technology can be applied to the valuation of private assets, risk management data, legal identifiers, security-level data, and more. As the initiative progresses, the next phase will explore the integration of established Swift messaging standards, making the on-chain unified golden records interoperable with and consumable by existing mission-critical portfolio processing and management systems utilized by financial institutions.

Collaboration and Co-Creation: The Path Forward

The success of this initiative underscores the power of collaboration and co-creation across the financial industry. By bringing together leading market infrastructures, financial institutions, and blockchain ecosystem partners, the initiative has demonstrated the transformative potential of leveraging cutting-edge technologies to address longstanding challenges. As Stéphanie Lheureux, Director of the Digital Assets Competence Center at Euroclear, aptly states, "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."