Blockchain Management Styles At 3 Systemically Important Financial Institutions Show A Diversity Of Strategies

Eufemia Didonato

Clockwise, from top left: Mariana Gomez de la Villa, distributed ledger technology program director, … [+] ING; Michael del Castillo, associate editor, Crypto & Blockchain, Forbes; Jennifer Peve, managing director, business innovation, DTCC; and Xue Wang, general manager, FinLab at China Construction Bank Fintech Corp. Forbes Three of the most […]

Three of the most prolific enterprise blockchain builders shared a virtual stage last week as they delved into the inner workings of how they use the technology popularized by bitcoin. Unlike your typical blockchain and cryptocurrency event, the trio—Mariana Gomez de la Villa of Dutch bank ING Group, Jennifer Peve of the Depository Trust & Clearing Corp. (DTCC) and Xue Wang from the second-largest bank in the world, China Construction Bank—spoke directly to senior-level executives at some of the largest companies in the world, sharing best practices on how to use the technology that some believe is a threat to their very survival.

The panel, Enterprise Blockchain Leaders: Tales From The Crypto, was just a small part of a larger event hosted by Forbes about our annual Blockchain 50 list of billion-dollar companies investing serious capital in the technology, and the platforms they’re using. 

Ripple chief architect David Schwartz joined Axoni founder Greg Schvey and Hyperledger vice president Daniela Barbosa to talk about best practices of the companies they’ve seen building on their platforms, followed by a chat between ConsenSys founder Joe Lubin and R3 cofounder Todd MacDonald about how the platforms their companies build on—Ethereum and Corda respectively—could change the very fabric of what central banks consider money.

Beyond the management tips though, two executives shared never-before-seen documents about how they vet projects and manage stakeholders, and every company has either already given away the code at the core of their projects or plans to do so. Since blockchain is only as powerful as the number of people who use it, participants in these ecosystems tend to embrace an all-ships-rise mentality, frequently contributing to the open source community where any developer can build on the software the firms develop. 

In other words, while the effort to build these networks has proven difficult and time-consuming, the lessons the event participants and others have learned are frequently shared with the world to use. The end result is that unlike many other industries where the learning of corporate research is frequently referred to as a secret sauce, these companies often—but not always—share their results with the world.

For example, as part of the event, ING distributed ledger technology program director, Gomez de la Villa provided Version Four of its framework for vetting potential distributed ledger use cases, and helping allocate resources accordingly. “We have specific conditions by which we can change our own infrastructure,” she said.

ING has previously published a reusable library of resources for creating and verifying what are called “zero-knowledge range proofs” for protecting data to GitHub where anyone can build on it.

Also, DTCC managing director Peve shared a sample agenda for its six- to eight-week stakeholder management seminars, in which it helps its partners understand how blockchain could impact the way they do business. “Ultimately, what we have learned is that as we bring these use cases to life, it has helped us get in front of these clients in a more meaningful manner,” said Peve.

Sample agenda below:

Topics to be covered in the engagement phase:

  • Business aspects: fit, feasibility of implementation (cost to achieve vs. benefits to stakeholders)
  • Current state cost (stakeholders)
  • Build and operating cost (DTCC)
  • Impact analysis (stakeholders, DTCC)
  • Operational aspects: process flows, role profiles, DTCC services and standards, onboarding, smart contracts, functional requirements
  • Technology aspects: proposed platform design, current state technical architecture, data modeling, non-functional requirements, messaging and integration requirements, data security standards

For each session we established an objective.  For example, Meeting 1 was Business and Process Overview. We outlined the attendees we believed would provide the right insights; for example, in meeting 1:  Product & Operations SMEs of relevant business unit(s) and Key Support Functions.  The objective we shared was “Inform future sessions by better understanding the firm’s role in private markets/alternative investments, discuss pain points/challenges in the space and learn about how digital and integrated processes are today.”

If we take one of the sessions focused on technology, the agenda includes:

  • Platform and interaction overview
  • Platform architecture
  • Interfacing options
  • Reporting and audit requirements

In these sessions we ask specific questions that help us understand a firm’s ability/interest in integrating through on-chain and off-chain flows, plus drill into non-functional/integration requirements. We ask things such as:

  • Ability to interact with a cloud-based solution (vs. on-prem)?​
  • Experience with cloud infrastructure? (AWS vs. Azure)​
  • Experience with containers? (Kubernetes, Docker, etc.)​
  • Experience with Ethereum, Fabric, Corda, others?
  • Organization preference on private/permissioned vs. public/permissionless DLT?
  • How API-enabled are they?
  • Preference for APIs (REST, gRPC, XML-rpc?
  • Authentication mechanism preferred for API calls?

Beyond that, much of Ripple, R3 and China Construction Bank’s code is open source, ConsenSys builds on open-source ethereum, and all of the code bases supported by Hyperledger are open source. 

Even secretive Axoni, behind the Axcore platform used by the DTCC has said it will contribute some of its code to the open-source community. Though Axoni cofounder Greg Schvey stopped short of the kumbaya-mentality frequently shared by blockchain builders, adding that there are limits to the benefits of sharing. “People forget how much data transmission is actually not happening on the open internet,” he said. “And how much restriction is actually put in place by corporations to ensure the data from the internet is not freely flowing in and out of the four walls of that institution.”

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