Chainlink (LINK) Partners with Financial Giants to Modernize Corporate Data Processing Using AI

TLDR

• Chainlink launched initiative to standardize corporate actions data using AI and blockchain
• Major financial players involved including Euroclear, Swift, and Franklin Templeton
• Initiative combines AI language models with oracle technology to process unstructured data
• Project aims to reduce operational costs that currently amount to $3-5M per institution annually
• First phase focuses on equity and fixed-income data across six European countries

Chainlink has launched a groundbreaking initiative to standardize corporate actions data processing, partnering with leading financial institutions including Euroclear, Swift, and Franklin Templeton.

The project combines artificial intelligence and blockchain technology to address the historically fragmented nature of corporate data distribution across global markets.

We're excited to announce the results of an industry-wide corporate actions initiative between Chainlink, Euroclear, Swift, & 6 financial institutions.

We successfully demonstrated how AI, oracles & blockchains can solve a decades-long unstructured data challenge in finance pic.twitter.com/4YOT5tX2sr

— Chainlink (@chainlink) October 21, 2024

The initiative targets the complex challenge of streamlining how corporate actions – such as mergers, dividends, and stock splits – are processed and distributed throughout the financial sector.

These vital pieces of information currently exist in various formats across different countries, creating significant inefficiencies that cost individual financial institutions between $3 million and $5 million annually.

“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,”

said Chainlink co-founder Sergey Nazarov during the project’s announcement at the SmartCon conference in Barcelona.

The first phase of the initiative focuses on equity and fixed-income securities data across six European countries. Chainlink’s innovative approach combines decentralized oracles with multiple large language models (LLMs), including OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude.

These AI systems work together to extract and process corporate actions data from various unstructured sources, such as PDFs and press releases.

The technical infrastructure transforms this raw data into standardized “Golden Records” that comply with global financial standards, including ISO 20022 and Securities Market Practice Group (SMPG) guidelines. These records are then distributed across different blockchain networks using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), ensuring consistent and accurate information across all platforms.

Mark Garabedian, Wellington Management’s director of digital assets and tokenization strategy, emphasized the efficiency gains:

“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.”

The project has attracted an impressive roster of financial institutions, including UBS, CACEIS, Vontobel, and Sygnum Bank. The blockchain ecosystem is represented by networks including Avalanche (AVAX), ZKsync (ZK), and Hyperledger Besu, which are contributing their expertise to the initiative.

The problem of fragmented corporate actions data is particularly acute in markets like Europe, where information is scattered across multiple jurisdictions and formats.

The current system relies heavily on manual processing, leading to delays, errors, and significant operational costs. Chainlink’s solution aims to automate these processes, reducing the risk of errors while increasing the speed of information distribution.

Future phases of the initiative will explore integration with existing financial infrastructure, including Swift messaging standards, to promote broader industry adoption.

This integration is crucial for ensuring that the new system can work seamlessly with established financial networks while providing enhanced efficiency and accuracy.

The initiative represents a significant step forward in the modernization of financial market infrastructure. By combining AI capabilities with blockchain technology, Chainlink and its partners are addressing one of the most persistent challenges in financial data management.

The standardization of corporate actions data could lead to more efficient markets, reduced operational costs, and improved accuracy in financial information processing.

Recent developments include successful pilot programs that demonstrated the system’s ability to process complex corporate actions data across multiple jurisdictions.

The initiative’s first phase has shown promising results in reducing processing times and improving data accuracy, according to participating institutions.

The project team is currently focused on expanding the system’s capabilities and onboarding additional financial institutions. They are also working on enhancing the AI models’ ability to handle increasingly complex corporate actions data while maintaining high accuracy standards.

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