Trusted Credentials & Identity? Some observations. Stuff worth knowing from The Bankers’ Plumber

Are you who you say you are and are you where you say you are? Identity. A fundamental enabler.

Last week, I had the pleasure of spending a couple of days in the company of some really talented folk at the OECD Blockchain Expert Policy Advisory Board (BEPAB) in Paris, where we shared with the OECD our view on what policies we need now to pro-actively make the most of what new technology offers us.

Blockchain has been helpful. It’s arrival and its magnetism have attracted interest and provoked some thinking. Ignore the word Blockchain for a second. Eyes have been opened to what society has to gain from process improvement. I recommend reading Accenture’s Banking on Blockchain and the very recent Australian National Blockchain Roadmap.

At the OECD. Joe Lubin from ConsenSys and Heather Dahl from the Sovrin Foundation shared some important insights. Heather made a compelling case for how “identity” is absolutely fundamental to building better processes. She talked very enthusiastically about “self sovereign identity”; storing identity in a way that we can add to the central records and then share what we need to as as we need to. She gave a great example of leasing a car; the finance company wants to know you have a valid driving licence and that you have an income. They need only some details from you; not all of the details of your driving licence, not all of your employment details.

The value here comes from having a cumulative record, that starts with government, as your official birth certificate is added to by government and other official “actors”; for example your driving licence is followed by your driving licence and then your high school and university, even if those events happen “cross-border” in another country. Then there is employment and income data. Distribution or sharing must be controlled by the individual; you control what who sees what. Some access rights must be sacrosanct; the department of motor vehicles should not need to ask your permission to suspend your driving licence. This of course assumes the cryptography is not crackable, or whatever the right term is.

A couple of examples from our family’s current administrative burdens highlights the potential for better process.

In Switzerland, families receive a generous, USD 250 per month, child allowance until the child finish education. It is paid via the employer of the higher earning parent. Our two kids are still studying, so this applies to us. In our case, it is paid via my company. I recently received the 2019 year end statement, together with the numbers for 2020, form the SVA, the particular left hand of the federal government that deals with child allowance and social security matters. They showed payment for only one child; so I wrote and asked what happened about our daughter, who is half way through her first year at the ETH, a federally run uni here in Zurich. No reply. Then a couple of days later I received a letter from the ETH with two sheets of heavy paper, perforated into eight or so neat parts, each with the details of Jessica’s enrollment for the current semester, one of which I was supposed to tear off and mail to the SVA.

I am a process hawk. Here we were as taxpayers, spending our free time to coordinate and pay for the administration of three somewhat uncoordinated left hands of federal government:

  1. The federal postal service for two physical mailings
  2. The social security administration to sort out entitlements

What makes this really ironic, is that the university is an elite one, something like the combination of MIT & Caltech, or Oxford & UCL. A massive amount of intellectual and scientific brainpower and we’re still shuffling paper!

On another front, our son needs to change universities. He is studying in England. He needs to provide some official information to the potential new uni, so called transcripts. He needs something from his international high school in Zurich and his AP scores from the US based college board. The admin skills of the 21 year-old male were challenged.

In summary: Now the existing processes work. They are effective, but we should not confuse that with efficiency. The latter matters a lot; the Swiss government has been growing faster than GDP for years. We are not efficient.

Even the cursory look at our own lives quickly shows us where there are some horribly inefficient processes. A “self sovereign identity” would make a big difference, it would enable us to collaborate far more easily. Setting that well requires that we can trust the results. Identity is very much foundational.

DLT or Blockchain technology is all about collaboration and trust. It is not the best answer to everything, but its existence has driven us to look at our poor processes and identify the potential for better, faster and cheaper.

That is why forums such as the OECD and its Blockchain Expert Policy Advisory Board (BEPAB) have a role to play. That policy work formally highlights the potential and the areas where direction is needed. There is also the informal; progress requires collaboration, which is a function of opportunity, expertise and giving or sharing of know-how. The OECD’s forums add huge informal value.

About the Author: The Bankers’ Plumber. I help banks and FinTechs master their processing; optimising control, capacity and cost.

Right now, I am part of the team at Fnality International which is working on turning The USC, Utility Settlement Coin, Project into reality.

If it exists and is not working, I analyse it, design optimised processes and guide the work to get to optimal. If there is a new product or business, I work to identify the target operating model and design the business architecture to deliver those optimal processes and the customer experience.

I am an expert-generalist in FS matters. I understand the full front-to-back and end-to-end impact of what we do in banks. That allows me to build the best processes for my clients; ones that deliver on the three key dimensions of Operations: control, capacity and cost.

Previous Posts

Are available on the 3C Advisory website, click here.

Publications

The Bankers’ Plumber’s Handbook

Control in banks. How to do operations properly.

For some in the FS world, it is too late. For most, understanding how to make things work properly is a good investment of their time.

My book tries to make it easy for you and includes a collection of real life, true stories from 30 years of adventures in banking around the world. True tales of Goldman Sachs and collecting money from the mob, losing $2m of the partners’ money and still keeping my job and keeping an eye on traders with evil intentions.

So you might like the tool kit, you might like the stories or you might only like the glossary, which one of my friends kindly said was worth the price of the book on its own. Or, you might like all of it.

Go ahead, get your copy!

Hard Copy via Create Space: Click here

Kindle version and hard copy via Amazon: Click here

Cash & Liquidity Management

An up to date view of the latest issues and how BCBS guidance that came into force from Jan 1 2015 will affect this area of banking. Kindle and hard copy.

Hard Copy via Create Space: Click here

Amazon UK: Click here

Amazon US: Click Here

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Olaf Ransome

Olaf Ransome

12 Followers

The Bankers’ Plumber. I help banks and FinTechs master their processing; optimising control, capacity and cost. I also offer training courses; Operational Risk