Guest Lecture Porsche Consulting

Question 1

DLT-based market infrastructure with highest efficiency potential in Middle- & Back Office (MBO)- processes – results sensitive to assumptions made

Answer 1

1. 7-15 bps p.a.
   efficiency advantage corporate bond* (run-only)
2. MBO (Middle- & Back Office)
   as sole source of efficiency gains
3. Infrastructure maturity & cross border perspective
   with very high impact on overall results**

Question 2

Key results domestic investors– market maturity as prerequisite to net efficiency gains

Answer 2

Impact on Value Chain – Foreign Investors
Corporate Actions, Clearing and Settlement as core efficiency sources

Key results foreign investors – high cross border fees enable instant cost advantages

Question 3

Implications for market participants
Excerpt of implications of study
—

IT & Operations
* For production at scale, clear definition of DLT capabilities and its required IT building blocks needed – depth of own value creation as well as legacy IT to be considered
* On- and off-chain world have to be run in parallel for an unforeseeable period of time → therefore orchestration layer very important
* Each bank / asset manager with the need to carefully and thoroughly selecting the right processes for effective smart contract application

Answer 3

Product Strategy
* Expansion of today’s largely revenue driven DLT product portfolio towards more cost driven products
* However: Sufficient volume to reach profitability thresholds even more important for cost driven
products → this puts issuers of financial market products in a favorable starting position

Pricing & Distribution strategy
* Market participants with decision to make whether to incorporate efficiency gains / cost advantages or to distribute amongst its sales organization (e.g. as incentivization tool)