The future of finance is undeniably linked to blockchain, but Accenture plans on doing things a little differently.
Blockchain as a technological concept promises some pretty extraordinary things, be it giving a person with no identity tangible proof of their existence in a global community, or helping to make tons of paperwork disappear.
There is no denying that, at its core, blockchain is a technology that aims to fundamentally turn the financial industry on its head, making it more automated, frictionless and transparent.
That’s the opinion of David Treat, a managing director and Accenture’s global head of blockchain, who I first spoke to in October as a fellow judge at the firm’s Blockchain for Good Hackathon in Dublin.
In the space of four years, Treat said that his interest in blockchain technology has gone from a hobby to his full-time job, thanks to a chance encounter with a student at Silicon Valley think tank Singularity University.
Looking beyond bitcoin
Up until around this time, blockchain was only ever talked about as the technology that keeps the cryptocurrency bitcoin running, but people were quickly learning that it could do much, much more.
Treat found himself fascinated with blockchain’s potential.
“I spent the next entire day with a group of people all fired up around exploring what this is going to do to investment banking,” he said in conversation with Siliconrepublic.com.
Now, just a few years later, some of the world’s largest banks are coming together to form their own digital currency built on blockchain.
Expected to launch next year, the ‘utility settlement coin’ won’t be a rival to bitcoin, but it will help banks to develop the blockchain technology necessary to bolster the transparency and exact record-keeping they want for financial transactions.
This is just one of the potential benefits that Treat sees in blockchain, as it highlights efforts by companies to look beyond each other as competitors, and view them as instigators of a complete overhaul of how financial transactions are processed.
Blockchain as a ‘team sport’
One such effort that Treat and Accenture are involved in is the Hyperledger project, an open source collaboration initiated by the Linux Foundation to create a cross-industry blockchain platform, or ‘Fabric’.
Fabric helps to overcome some of the scalability and confidentiality issues seen in other blockchain platforms and “couldn’t be better designed if you wanted it to”, according to Treat.
“Blockchain is a technology that is a team sport. You need to have a network of players that are interested in sharing access to data,” he said.
“Having a core of financial services institutions and working together is great, but then the richness you get from having an [airline] come in or a car manufacturer; people who care about supply chains, start-ups and the global reach. It’s really turned into a fantastic platform.”
Accenture is going it alone with a patented technology that has caused quite a stir among those you might call ‘blockchain purists’.
By its nature, blockchain is supposed to provide complete transparency, with its distributed ledger able to show exactly who made a transaction and when, between multiple parties.
However, last year Accenture revealed it was working on an ‘editable’ blockchain, one that is adaptable to the financial and corporate world, where ‘fat finger’ trading errors remain a reality.
But doesn’t this go completely against what the technology was made for, and could it not have far-reaching and worrying ramifications? Treat sees it more as a ‘surgical fix’ to a sector that will need such ability in order to function, rather than a general use case.
“If I put some enormously sensitive piece of my medical information by mistake into your health wallet, there’s no reversing transaction, no regulatory, cultural or social construct that would say that’s OK and it can stay there, which it would in a traditional on-chain structure.”
“[The data] would have to be removed or shut the system down. We’ve designed it with the ability to do that, but it has a very narrow use case.”
Is the right to be forgotten removed?
While still in the developmental stage, an editable blockchain could prove crucial with the onset of the EU’s General Data Protection Regulation (GDPR) next year, where every citizen can ask any company to delete data on them.
A report issued by Accenture on the topic suggests that while the concept of blockchain – which keeps data archived forever as well as traceable – contradicts a person’s right to be forgotten, smart contracts (explained here) could actually be ‘custom fit’ to automate these requests.
“They could add granularity to personal data and encode permissions, conditions and restrictions for its use,” the report speculated. “They could also enable data portability and provide an easily auditable trail with proofs of consent.”
Blockchain outside of fintech
This is just one of the questions that Treat and his team will have to ask in the years to come but, from a personal perspective, he admits that the greatest changes could happen outside the financial world.
“For a guy who’s been in banking for more than 20 years now, I just couldn’t be more excited to do something with that scale of humanitarian focus,” Treat said, referring to Accenture’s work with ID2020, an organisation aiming to give everyone on Earth a digital identity.
“If we can actually follow through and really deliver on giving identity to the most vulnerable amongst us [using blockchain] and having them be able to participate in society and all of the benefits that come with that, that would be amazing.”