Custody Cost Optimization

Eliminate the daily grind of manual reconciliation between custodians, brokers, and internal ledgers. A single source of truth on a shared ledger means:

• Near-instant settlement (T+0) reduces capital requirements and counterparty risk.
• Automated audit trails slash compliance and reporting costs by up to 70%.
• Real-world example: A major custodian reduced reconciliation headcount by 40% and cut settlement fails by 99% by tokenizing private equity funds on a permissioned blockchain.

Tokenization transforms illiquid assets like real estate, art, or private equity into divisible digital tokens. This enables:

• Lower minimum investments, expanding your client base.
• Automated dividend/interest distribution via smart contracts, cutting administrative overhead.
• New custody fee models based on managing digital tokens, not just physical certificates.
• Case in point: A European bank launched a tokenized real estate fund, attracting 5x more retail investors and generating a 15% increase in custody fee revenue within the first year.

Move from expensive physical vaults and error-prone manual controls to cryptographic security. Blockchain provides:

• Programmable multi-signature (multisig) wallets that enforce governance rules, preventing unauthorized transactions.
• Immutable proof of custody that simplifies audits and can reduce errors & omissions (E&O) insurance premiums.
• Transparent ownership history that deters fraud and simplifies dispute resolution.
• Quantifiable impact: Firms report a 30-50% reduction in operational risk incidents related to asset movement and record-keeping.

Manual processing of dividends, stock splits, and voting is costly and prone to error. Smart contracts automate these workflows:

• Self-executing corporate actions ensure accurate, timely payments to token holders.
• Transparent, auditable proxy voting increases shareholder engagement and reduces legal challenges.
• Direct cost savings: A global custodian automated its proxy voting process, reducing processing time from weeks to minutes and cutting associated operational costs by an estimated $8M annually.

Avoid vendor lock-in and the complex, expensive middleware needed to connect legacy custody systems. Blockchain acts as a neutral settlement layer that:

• Connects directly to trading venues, transfer agents, and regulators via APIs, reducing integration costs.
• Enables atomic swaps for faster, cheaper asset transfers between institutions.
• Future-proofs your infrastructure for upcoming tokenized asset classes (e.g., carbon credits, intellectual property).
• ROI driver: One investment bank cut its annual middleware licensing and maintenance fees by 25% by adopting a standardized blockchain protocol for securities settlement.

Turn compliance from a cost center into a competitive advantage. An immutable, timestamped ledger provides:

• Real-time regulatory reporting capabilities, meeting MiFID II, GDPR, and Travel Rule requirements with less manual effort.
• Automated transaction monitoring for AML/CFT, reducing false positives and investigation workload.
• A permanent, verifiable record that cuts external audit preparation time by up to 50%.
• Business justification: Auditors can perform "continuous audits" on blockchain data, significantly lowering annual audit fees and building greater trust with regulators.

Begin by tokenizing internal assets like corporate treasury funds or inter-company loans on a private, permissioned ledger. This creates a controlled sandbox to validate technology and processes without external dependencies.

• Key Benefit: Eliminates manual reconciliation and reduces administrative overhead by 30-50%.
• Real Example: A multinational like Siemens uses internal blockchain ledgers to streamline intra-group cash pooling, cutting settlement times from days to minutes.
• Outcome: A proven internal workflow that demonstrates tangible efficiency gains and builds internal competency.

Extend the ledger to a select group of trusted counterparties (e.g., top 3 suppliers) for invoice factoring or trade finance. Smart contracts automate payment upon immutable proof of delivery.

• Key Benefit: Drastically reduces dispute resolution costs and accelerates cash flow.
• Real Example: Maersk's TradeLens platform digitizes bills of lading, reducing document processing costs by up to 40% and cutting transit times.
• ROI Driver: Transforms capital from being tied up in disputes to being actively deployed.

Leverage the immutable audit trail inherent to the pilot's blockchain. Automate compliance reporting for regulations like MiCA (Markets in Crypto-Assets) or financial controls (SOX).

• Key Benefit: Cuts manual audit preparation time by over 60%, providing a single source of truth.
• Real Example: Financial institutions use shared KYC/AML ledgers to reduce customer onboarding costs from ~$50 to ~$5 per check.
• Business Justification: Converts a cost center (compliance) into a streamlined, defensible process.

With a proven model, integrate with public blockchains or broader industry consortia. Enable new services like tokenized commercial paper or real-time supply chain financing for a wider network.

• Key Benefit: Unlocks new revenue streams and provides a competitive market advantage.
• Real Example: J.P. Morgan's Onyx facilitates billions in daily transactions for tokenized collateral and intraday repo markets.
• Strategic Outcome: Transforms the pilot from a cost-saving project into a core component of the business's digital infrastructure.