Nick Chong · 59 mins ago · 2 min read
The last week has seen several blockchain patents awarded to various innovators within the sector, including a cryptocurrency ETP patent filed by Gemini exchange owners the Winklevoss twins. A new patent awarded to trade-processing tech provider Broadridge Financial Solutions, however, could potentially see blockchain technology used to streamline corporate governance and shareholder relations.
A new US patent has been awarded to the financial services company that aims to leverage blockchain technology in order to “enhance the processes for proxy voting and repurchase, or repo, agreements.” In a press release published on Thursday, Broadridge Financial Solutions stated that the US Patent and Trademark Office granted the organization US Patent No. 9,967,238, which will allow Broadridge to begin implementing distributed ledger technology into their proxy voting product suite.
Proxy voting is currently a frustrating process for fund managers, shareholders, and investors due to the opaque nature of the corporate governance process, the long chain of intermediaries associated with the voting process, and overall operational inefficiency. In many cases, shareholders are often unable to determine whether their vote has been cast — a situation the Broadridge solution aims to change.
Finance Alliance Blockchain Pilot Project Bears Fruit
Broadridge Financial Solutions already offers a shareholder voting system called ProxyVote, which provides shareholders with the ability to cast votes and read notifications via any device.
Broadridge is a major player in the fintech space, boasting over $4 billion in revenue, and has already completed a successful blockchain tech trial in partnership with JP Morgan, Santander, and Northern Trust last year.
The pilot project, which was announced as successful in April 2017, saw Broadridge work with a number of financial organizations in order to explore the benefits of blockchain technology “to enhance global proxy vote transparency and analytics.” Broadridge’s initial blockchain trial was built upon the Ethereum blockchain, so it’s highly likely that any blockchain-based platform developed as a result of the new trial could be built upon a private Ethereum network.
Subsequent to the successful operation of the pilot program, Broadridge global head of corporate strategy VIjay Mayadas stated that the company believes “blockchain will drive increased quality and efficiency in the voting chain by reducing complexity that exists within the process today,” highlighting the importance of implementing innovative technology in order to improve corporate governance transparency.
Blockchain Technology Solutions Emerge in Enterprise Space
The new patent, entitled “Database-centered computer network systems and computer-implemented methods for cryptographically-secured distributed data management,” is intended to improve transparency within the corporate governance process by allowing shareholders to vote at a corporate meeting without needing to physically attend.
Using Broadridge’s solution, only authorized parties are able to access voting data, in an “Ethereum-like environment.” According to Broadridge, the new patent demonstrates how blockchain technology can be used to streamline reconciliation processes, improve data management, and minimize non-value added costs.
Broadridge President and Chief Operating Officer Tim Gokey commented on the patent:
“This blockchain patent is a significant milestone in Broadridge’s commitment to drive the innovation roadmap for the financial services industry. Through the invention of technology-based solutions, we aim to increase efficiency in the market and provide real business value for our clients that enables them to get ahead of today’s challenges and to capitalize on tomorrow’s opportunities.”
While the patent may focus on an extremely specific element of corporate governance, the fact that organizations such as Broadridge — who play a major role in the broader financial industry — are seeking to adopt blockchain technology demonstrates that distributed ledger tech will play a core role in the financial infrastructure of the future.
This latest foray into the world of applied blockchain technology within the finance industry highlights the growing number of enterprise organizations and large-scale financial firms seeking to capitalize on the benefits distributed ledger technology can offer.
With the recent release of the Ethereum Enterprise Alliance Architecture Stack, it’s highly likely that implementing private blockchain solutions such as the one outlined in Broadridge’s patent will become far more common.