Blockchain contains what everyone in data management, from data scientist to chief data officer (CDO), wants: Information that comes with complete provenance. That is data showing who did what, when and with full history from day one. Verified by many third parties, transparent, with complete reconciliation and secured by the latest in cryptography.
This is a major step forward from today’s underlying spreadsheet processes couture.
Ah… the spreadsheet. Want any number in particular? No problem. Couple of clicks and the unit, area, region or group meets its target or stays within the guidelines. Yes in three or six months’ time, the numbers at the top level may not balance with the auditors, but hey ho.
Spreadsheets are prolific throughout financial services. There are even systems designed to take data and show it as a look a like spreadsheet. Well the staff is so familiar with spreadsheets they know what they like and few like change. Not only are the figures changed but usually without a record of who made the changes. Unattributed changes cannot happen with Blockchain.
Every entry in a blockchain is recorded by time and who made the entry. This information is distributed to the people in the chain, includes authorised regulators, every time a change is made. Each change is completely transparency and verified by many third parties. Blockchain numbers are true and transparent.
Now we have all heard of ‘garbage in, garbage out’. The data available across the many silos of a financial institution is a mixed bag in terms of quality. Often, because of legacy systems and the incongruity of new data elements, information is in many different places across the enterprise. Given 64% of banks have two or more data warehouses, with 18% having 11 plus warehouses (Banking Technology, September 2015) and many specialist, standalone databases finding the right data at the right time is complex. With Blockchain it is simple, there is only one source.
The precise content and value of Big Data (90% of the data in the world has been created in the last two years) may not be apparent until it has been properly analysed. This reverses the typical information governance approach by allowing access to minimally governed data while ensuring new data insights become fully governed before they are applied to enterprise decisions. The proliferation of available sources increases the risk of untrusted data entering the governed information landscape, undermining insights. Blockchain provides only trusted data.
Confidence in Data management insights output would soar as Blockchain gains ground. Even with a few blockchains at present they do represent a moment of truth. By comparing data sourced from a blockchain to that generated elsewhere a sense of realism can be achieved.
Reference data projects using blockchain are underway. SWIFT, for example, is working on Standing Settlement Instructions for payments (SSIs), while giving a permanence sense of purpose of where the repetitive payments are going, are constantly changing. SWIFT has reported 10% changes in SSI in a quarter. Similarly, fintech companies are working on blockchain Legal Entity Identity (LEIs) to separate out the information needed on LEIs to meet legal compliance.
Data management is the new science as demonstrated by the opening of the Alan Turing Institute by the UK in October 2015. The institute, headquartered at The British Library, has a mission that includes creating new business opportunities in the new world in the ‘Age of Algorithms’ using digital data. Blockchain data with its attributes built on the foundations of great data management stands to become a supreme friend.
If you’d like to learn more about blockchain technology, visit https://icn.sap.com/news/Blockchain.html