In early 2025, Calastone published Decoding the Economics of Tokenisation, projecting that distributed ledger technology (DLT) could reduce fund operating costs by up to 23% and unlock more than US$135bn in industry-wide efficiencies. Its new follow-up study, Tokenisation at Work, examines that thesis at a granular level. Based on the same dataset, it unpacks the detailed cost structure of fund operations, the source of error rates, and the areas where tokenisation could deliver the most measurable benefits.

What’s driving the cost problem

Using a US$1.264bn benchmark fund as a model, Calastone breaks down annual operational costs, with fund accounting topping the list at more than US$2.1m. Reconciliations (US$837,495), transfer agency (US$620,459), and settlements (US$615,646) follow closely. Altogether, 64% of fund costs reside in the back office, much of it tied to manual oversight and redundant processes. 

Nearly half of all spending (47%) goes to direct headcount, with 53% allocated to third-party providers. This labour-heavy structure shows that fund operations remain resource-intensive, even in an era of increasing automation.

This concentration of cost helps explain why 0.74% of AUM is lost to operational overhead and why fund accounting, transfer agency, and reconciliations are the top targets for transformation. Calastone argues that tokenisation offers an opportunity to redesign this cost base fundamentally, rather than just digitise inefficient processes.

The hidden toll of manual work

Calastone’s data shows that operational errors are not just costly, they are frequent, systemic, and symptomatic of deeper inefficiencies. Reconciliations alone account for an average of 18.3 errors per fund every month, with each one costing over US$25,000 in time. Trade execution records 10.6 errors monthly, at an average cost of US$14,676 each. Fund accounting sees 7.1 monthly errors, each worth roughly US$9,830 in time and resource drag.

These recurring issues stem from a fragmented infrastructure built on duplicated data, manual oversight, and reconciliation-heavy processes. Calastone describes them as a structural tax baked into the current operating model, one that compounds both cost and operational risk.

Tokenisation, by replacing siloed data flows with a shared, immutable ledger, offers the potential to eliminate entire categories of errors by design. In a ledger-native environment, reconciliations become obsolete, and error remediation shifts from a constant burden to a manageable exception. For many asset managers, this shift represents not just a cost-saving, but a fundamental upgrade in operational resilience.

Spotting the biggest wins

Calastone's modelling shows fund accounting as the biggest efficiency opportunity, with a projected 29.79% cost reduction. Transfer agency is next (25.21%), followed by compliance monitoring (23.75%) and trade execution (21.88%).

Respondents flagged transfer agency as a particularly high-priority function for transformation. Every respondent in the survey ranked it as a major area in need of reform, citing its manual burden and fragmented structure. But the firm notes that tokenisation shouldn't just digitise one link in the chain, it should enable a full redesign of the post-trade model.

While cost reduction remains the main driver, firms are also responding to compliance pressures, operational risk, and distributor demands. The most effective tokenisation strategies, the report suggests, will address all of these forces together.

Turning efficiency into scale

Reducing operational costs also enables pricing flexibility. The study found that a 10% cut in TERs (total expense ratios) could generate a corresponding 10% AUM increase from wealth and retail channels, and 6% from institutional investors.

Some respondents were more bullish: 55% expected between 11% and 25% AUM growth from wealth investors, and 18% forecast over 25% growth from retail.

Calastone says this feedback underscores the strategic upside of tokenisation: by reducing the cost base, managers can lower fees and capture more price-sensitive investors. The firms that move first may be able to outcompete rivals on cost, fee structure, and scale.

Mind the gap

Calastone's research also reveals organisational friction. Innovation teams score highest (4.1/5) for driving tokenisation efforts, while core functions like compliance (3.0), finance (2.6), and operations (2.8) lag behind.

That matters, because 86% of leaders in those core functions say they struggle to see the ROI of tokenisation. Since these are the teams that will have to deliver transformation, their uncertainty poses a major hurdle.

Deployment costs (55%), feature limitations (30%), and unclear business cases (19%) are the top barriers to adoption. Calastone argues that success depends on cross-functional ownership and on giving operational teams clearer economics and practical examples to work with.

Tokenisation vs the global sprawl

On average, tokenisation could shorten fund launch timelines from 12 to 9 weeks and reduce seed funding needs from US$50.3m to US$38.1m. But the firm’s latest data shows wide variance by fund type and firm ambition.

Domestic funds see more modest gains, with 2-week timeline cuts and a 24% drop in seed capital from US$35.8m to US$28.1m. For cross-border funds, the impact is more pronounced. These funds currently take 14 weeks to launch and need US$63.5m in seed capital. Tokenisation reduces those to 10 weeks and US$48.3m, thanks to simplified compliance and unified infrastructure.

Some managers are even more ambitious. Nearly 40% expect to cut seed capital needs by between 26% and 50%, delivering potential savings of up to US$25.2m. These expectations reflect a cohort of firms prepared to overhaul legacy launch models rather than just automate them.

Calastone argues that these numbers show tokenisation’s most immediate value may lie in collapsing cross-border complexity. Replacing fragmented jurisdictional processes with a single distributed ledger could cut down launch friction significantly.

Time to fix corporate actions

The study highlights corporate actions as one of the least discussed yet most fragmented areas of fund operations. Despite their importance, there is no standard approach to how these costs are treated: 53% of managers embed them in TERs, 27% treat them as overhead, and 20% assign them directly to fund performance. This patchwork creates significant opacity for investors, who have little visibility into how or even if these costs affect their returns.

Behind the scenes, the operational load is considerable. Corporate actions are typically managed across multiple intermediaries using disconnected systems, creating delays, duplication, and risk. Calastone argues that this is a problem hiding in plain sight: an inefficient, manual process that escapes scrutiny because it’s seen as operational plumbing.

Tokenisation offers a way to rethink this architecture entirely. With a distributed ledger and smart contracts, corporate actions can be executed automatically and in real time, reducing manual effort and eliminating the need for bespoke workarounds. Cost allocation becomes standardised and transparent, offering both operational and investor-facing benefits. In a tokenised environment, corporate actions shift from a silent cost centre to a candidate for innovation.

Where change really begins

Calastone's core message is that the business case for tokenisation isn’t abstract. It’s functional, quantifiable, and buried in the daily operational load.

Back-office costs dominate fund economics. Errors drain productivity and introduce risk. Fund launches are slower than they need to be. Cost opacity, especially around corporate actions, undermines investor trust. And unless core teams are aligned, the move from pilot to production may stall.

The company’s estimate of US$135bn in industry-wide savings remains unchanged. But the new data reveals what that figure is built on. Firms looking to realise their share of that upside must focus not just on tokenisation’s promise, but on its fit with the operating model they use today. The path forward, Calastone suggests, begins not with theory, but with process-level change.