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Towards ambient accountability in financial services: Shared ledgers, translucent transactions and the technological legacy of the great financial crisis
The consensus in the finance sector seems to be that the shared ledger technology behind Bitcoin, the ‘blockchain’, will disrupt the sector,1 although many commentators are not at all clear how (or, indeed, why). The blockchain is, however, only one kind of shared ledger and the Bitcoin blockchain works in a very specific way. This may not be the best way to organise shared ledgers for disruptive innovation in financial services. So what is? And why would financial services organisations want to exploit shared ledger technology? This paper sets out a simple shared ledger taxonomy and layered architecture designed to facilitate communication between technologists, businesses and regulators in the financial services world, and explains why the various forms of shared ledgers might be attractive to financial services organisations, borrowing the phrase ‘ambient accountability’ from architecture to suggest a new way to organise a financial sector.
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David Birch is Director of Innovation at Consult Hyperion, the secure electronic transactions consultancy. He is an internationally recognised thought leader in digital identity and digital money and was named one of the global top 15 favourite sources of business information (Wired) and one of the top ten most influential voices in banking (Financial Brand). He was listed in the top ten Twitter accounts followed by innovators, along with Bill Gates and Richard Branson (PR Daily) and was ranked in the top three most influential people in London’s FinTech community (City A.M.). He was also voted one of the European ‘Top 40’ people in digital financial services (Financial News) and was rated Europe’s most influential commentator on emerging payments (Total Payments). He graduated from the University of Southampton with a BSc (Hons) in Physics.
Richard G. Brown is Head of Technology for a partnership of global banks designing and delivering advanced shared ledger technologies to global financial markets. Formerly Executive Architect for Banking Innovation at IBM, he is a leading authority on this technology and maintains a widely read blog on the topic. He co-authored the IBM Academy of Technology’s first paper on Bitcoin, and his writings have been cited by the Financial Times, the Bank of England and multiple influential reports. His fifteen-year career at IBM encompassed a variety of architecture and consulting roles, specialising in the application of new technology in banking and financial markets. He is an adviser to several FinTech start-ups and he mentors at London’s Startupbootcamp FinTech accelerator. He is a Chartered Engineer, and holds an MBA with Distinction from Warwick Business School and a first-class degree in Mathematics from Trinity College, Cambridge.
Salome Parulava is a Consultant at Consult Hyperion. She holds an MSc in Information Systems Management and Innovation from the Warwick Business School, where her thesis on the potential for blockchain technology in post-trade settlement was awarded a distinction. Previously, she led a number of software development teams in the FinTech field and was Head of Organisation of the SUMIT Startup School, one of the key start-up accelerator programmes in Russia. Salome has a degree with Honours in Mathematical Economics from the Saint- Petersburg State University of Economics and Finance. Her research interests include shared ledger technology, peer-to-peer networks, financial technology, securities markets, and information and knowledge-sharing across financial systems.