New Frontiers In 2019 …

2018 was a stimulating, demanding year for CBoxx bringing consultancy and research on new projects around blockchain technology, financial regulation, decentralised identity, data standards, integrations and legacy system migrations at scale. It’s hard to draw a common theme from all this but perhaps the general concept of exploring new frontiers comes closest. You can read about a few of these projects below:

The rush of excitement over the potential for blockchain technology seems to have gone past the hype cycle now, severely dampened by the “Crypto Winter” of 2018 and the growing attention of financial regulators. Much of the CBoxx work in Q2 2018 was centred around research into crypto-regulation and it’s clear that this is the right direction because it will bring trust, confidence and protection into this field.

CBoxx is a company that is driven by the desire to make things work, not wild speculation. As the sharks and chancers are driven out of this field, it leaves the serious practitioners to concentrate on solving the problems that sensibly must be addressed by the blockchain industry. For example, the January 2019 “Constantinople” hard fork upgrade for the Ethereum global decentralised network is fully focussed on improving the utility, cost and usability of the network that will keep Ethereum on the road to ‘proof of stake’ consensus that promises to bring true mass adoption.

This McKinsey article provides a realistic summing up of the blockchain field today (with thanks to David Taylor of OCP for sharing). CBoxx originally pinpointed Identity as an exciting use case for blockchain and McKinsey have the same view. So it’s very exciting to have been involved with the foundation of the Frontiers In Blockchain peer-reviewed journal that launched in Q3 2018. Our specific Research Topic within the journal will be focussed on how to make Self Sovereign Identity happen…

Frontiers In Blockchain | Blockchain for Good

Self-Sovereign Identity gives people control over their personal information, including the mechanisms to grant, revoke and apply constraints to their consent for others to use it. The open standards and technical infrastructure for these ecosystems are now materialising due to the pervasiveness of the internet, mobile devices, the emergence of viable decentralised networks and the intellectual capital of the identity community.

However, there remain serious challenges for generating the change needed for society to willingly trust and transition to this approach. Therefore, our Research Topic on Frontiers In will aim to generate a rich resource for identity practitioners, researchers, technologists, potential adopters and many more to explore, understand, advance and enrich this subject. Many leading lights in this community are already signed up to contribute to the journal and peer review the contributions of others.

At the beginning of 2019 it’s tough to predict where CBoxx  will end up, but Self Sovereign Identity feels like the right place to start …

Blockchain Primer Paper on Decentralised Identity

The rise of decentralisation ushered in by blockchain technology and the personal computing power of the smartphone has offered up a practical new way to manage Digital Identity that is appealing to nearly everyone and has enormous potential everywhere; from financial services to global supply chains to the humanitarian sector.

Self Sovereign Identity turns our ideas about how digital identity is managed on their head and perhaps promises to solve many of the problems we face today related to data security, data protection and the rapidly increasing burden of corporate risk.

This new primer paper from CBoxx draws together the main concepts, key players and initiatives, interesting use cases, progress on open standards and some of the latest thought leadership in the area, as of September 2017 …

CBoxx Identity Matters Primer Paper v04

Addressing Global Challenges with Blockchain Technologies

Al Sherriff, CBoxx MD

On a blazing hot day in May, blockchain experts and innovators came together with NGOs, charities and other third sector organisations in a conference room at techUK in London to discuss the role of blockchain related technologies in addressing global challenges. Collectively the group is known as “Blockchain for Good”. I was excited to be invited onto the discussion panel and I have to admit also slightly nervous of the ambitious scope of the subject in hand. My role was clearly to be the technical expert on the panel.

An inspirational opening keynote from Robert Kay, director of DISC Holdings paved the way to further sessions from pioneering companies presenting their businesses and real world use cases. The panel discussion concluded the event.

DISC Holdings were formerly GovCoin – relatively high profile in blockchain circles with a project focussed on working with the Department of Work & Pensions to trial the use distributed ledger technology in providing transparency and tracking in the payment and use of welfare benefits by claimants.

In common with several other first session speakers, DISC are members of the FCA Regulatory Sandbox and therefore thoroughly engaged in examining the role of regulation with their business. In April this year, the FCA launched DP17/3, an industry consultation on the need (or not) for the regulation of Distributed Ledger technology. There were other speakers from amongst the FCA Sandbox membership: Raphael Mazet of and Laura Bailey of Disberse. Both companies are aiming to provide a DLT platform for tracking charitable donations, though within broadly different sectors. The goal is to try and eliminate fraud and increase transparency and trust in the charity funding supply chain.

Another common theme of the day was the technical challenge of scaling with distributed ledger platforms, with several companies reporting they are gearing up to tackle that problem next, while one has been forced to maintain an off-ledger workaround for managing any surges in use. This provoked an audience question of “why are you using a DLT then?” The answer being that they definitely do see DLT as the long term solution and they are confident that the technology will work through and shrug off these early teething problems.

Karl Hoods (@karlhoods), CIO of Save The Children bravely presented off the cuff, without slides or notes and he had also just been struck on the head by a pigeon on his way to the conference. Save The Children have been exploring the potential for this technology for some time under Karl’s guidance and are also interested in funding transparency, along with child safeguarding and “on the ground identity” for aid workers.

The panel discussion that followed comprised the always massively entertaining Dave Birch (@dgwbirch) of Hyperion, Mike Brookbanks of University of Surrey, Rhodri Davies of Charities Aid Foundation, Sue Lukes of MigrationWork CIC and myself. Following introductions I fielded a question voicing concerns about scaling and fees. The price of Ethereum has risen massively since the turn of the year and even further since the conference! There’s a fear that this could drive up the network fees that need to be paid to operate Ethereum based decentralised applications, making it unrealistic to work with. In practice this should not be the case because the Ethereum transaction fees (Gas) are priced separately from the network currency (Ether). Effectively, the more you pay, the quicker your transaction will be settled. Making all this work in real-world operations does depend on very careful design and thought from the outset though.

In general the panel urged optimism but extreme caution in the use of blockchain in this area – an area that is basically aiming to help very large numbers of vulnerable and/or unbanked people. Right now, there are few, if any, safeguards in the blockchain world and there are plenty of technical challenges to overcome before the tech can be confidently used at scale. Customer Service is usually very primitive or simply non-existent at the moment from blockchain based companies. That cannot be acceptable within the ‘for good’ sector. There simply cannot be a situation where losing a private key means a vulnerable person loses of all their funds, with absolutely no recourse and nowhere to turn.

Personally I expect to see the issues of scale being resolved within the next year on Ethereum, Bitcoin and accelerated by emerging blockchain network technologies such as IOTA and Tezos. The actions of the FCA need to be supported and followed closely, particularly by this sector where regulation is surely a must have.

Our thanks must go out to hosts and organisers Dr Richard Adams (@r_jadams) of the University of Surrey and Professor Glenn Parry (@drgeep) of UWE in taking the initiative to bring the group together. Overall it felt like the goal of bringing together two different communities that do share broadly similar values has worked, sparking a number of new conversations, connections and ideas between those present.  I do hope the good work continues …

Further links with insights from other speakers I’ve not mentioned above are here:

Six Key Points from FCA Distributed Ledger paper DP17/3

DP17/3 strikes me as an important paper that demonstrates the FCA’s very strong understanding of Distributed Ledger Technology gained first hand through their Regulatory Sandbox program. The paper appears to be driven by their realisation that they may need to regulate DLT because it represents a potential technology shift for financial services market comparable in impact to the dematerialisation of securities from paper to electronic form.

Discussion paper FCA Discussion Paper DP17/3 on Distributed Ledger Technology was released on 10th April by the FCA (the UK financial services and markets regulator)  with a view to …

“… launching a discussion to start a dialogue on the potential for future development of distributed ledger technology (DLT) in the markets we regulate.”

Here is a quick summary of the key points that I’ve taken from the paper but I think it warrants a full read by anyone involved and interested in DLT and UK financial services (I’m not going into the ‘DLT’ vs ‘Blockchain’ terminology/classification debate here):

(1) I’ve heard many people say that the FCA will not regulate DLT because they regulate business, not technology. However, this paper clearly explains that while the FCA ‘technology neutral’ approach currently does hold true with respect to DLT, they could change their mind about that. This paper is a step towards making that decision.  The FCA see parallels with the move from paper-based to dematerialised securities that forced a rethink of previous regulatory conventions.

(2) The FCA can see a wide range of very valid and exciting financial services FinTech and RegTech use cases for DLT. These include, amongst others cited: reduction in financial crime, reengineering reinsurance markets, regulatory reporting and perhaps even a wholesale rethink of Asset Management through some disintermediation ultimately leading to lower costs and transparency for consumers . In general “If DLT can offer a more resilient system than currently available, it may help deliver on our statutory objectives.”

(3) Common Business Standards may be necessary to realise the benefit of DLT. This is fairly obvious to those who have been working in financial services for a while. DLT is a technology, a ‘protocol’, but not a standard for business processes and market practice. In that respect it is often likened to the emergence of TCP/IP that underpins the Internet and enable todays online world. DLT/Blockchain networks have potential to bring forth the true “Internet of Value”. The FCA paper mentions that for insurance markets “Clear DLT standards for the management of contracts and risk data could significantly improve market functioning.” I would suggest that principle applies to all regulated financial services markets. Multiple regulated DLTs are looking likely to emerge and to be truly effective they need to be able to communicate with each other (interoperate) using common business standards.

(4) The allocation of responsibilities is crucial. Governance of decentralised networks is generally not clear and the FCA have taken particular note of the cautionary tale of The DAO where governance of an Ethereum powered venture capital fund worth roughly 150M USD collected from about 11,000 investors globally was entirely automated through smart contract code. A subtle flaw in that code allowed someone to anonymously drain about a third of The DAO fund away into their own private accounts. While the Ethereum Foundation eventually and very contentiously sorted it out through a hard fork (i.e. a rewind) of the network – should they have done that? Was it really their responsibility? If a regulator insists on getting involved here, you could speculate that DLT developers (and their code) in financial services could one day need to become regulated professionals in the same way that UK financial advisers are? FCA Approved Developers!

(5) The FCA is considering whether Initial Coin Offerings (ICOs) need to be regulated. ICOs are a newly emerged alternative to venture capital or crowd funding for startups. ICOs are not currently regulated so if you take part in one, there are no real rules, no official code of conduct and no recourse – it’s all very much at your own risk. The FCA notes that “depending on how they are structured, they may, therefore, fall into the regulatory perimeter”.

(6) The General Data Protection Regulation (GDPR) will apply in the UK from 25th May 2018. This will be a much stricter data protection regime (with far bigger penalties for being in breach) than the current data protection regime. One particular point is the ‘right to be forgotten’ that seems to run very contrary to the DLT principle of the immutable ledger. So the FCA have issued a warning here for “firms to consider their data protection obligations carefully when DLT is used to store, share and process client data”. For DLT aficionados there is also the acronym clash of ICO “Initial Coin Offering” and ICO “Information Commissioner’s Office” to navigate!

The FCA have got a Sandbox but they definitely don’t have their heads stuck in the sand (sorry, irresistible). They are actively engaging with the technologies and the industry – “We also look forward to hosting and attending events on DLT”.  In my opinion this is vital for driving adoption of DLT within financial services and the consequent consumer benefits.  

FCA paper DP17/3 requests responses to 17 questions by 17th July 2017 (several seventeens, is that significant!). The FCA are expecting to see “more movement from ‘Proof of Concept’ to ‘real-world’ deployments” from later in 2017 and so as an industry I think we need to pay close attention to this paper and respond thoughtfully.

Institute of Chartered Accountants explore the future with CBoxx and OCP

Having examined our paper on the future of financial planning the Financial Services division of the Institute of Chartered Accountants in England & Wales (ICAEW) contacted CBoxx and OCP to author a special article for their members magazine FS Focus.

The theme of the original paper was extended to explore how the boundaries between certified financial planning, chartered accountancy, tax and legal practices will continue to dissolve as technical advances such as cloud services, data driven machine learning, and secure data collaboration through blockchain inspired technology mean that financial professionals will access increasingly joined up services.

We also look at ideas such as the emergence of the new ‘legal programmer’ profession and how firms will come to differentiate themselves in the market through the quality and depth of teaching invested in their own expert systems. The tone remains positive throughout because although we see the industry changing radically, essential new professions will emerge and the outcomes will ultimately make the financial services industry cheaper, safer and far more accessible and broadly appealing for customers.

The FS Focus article itself is only available to ICAEW members but that article was based on our original futurology whitepaper that you can read here: Financial Planning: An Optimistic View of the Future

Interactive Blockchain Lectures at Hult International Business School

In November the Hult International Business School in London  invited Al Sherriff of CBoxx and David Taylor from OCP  to deliver an interactive lecture on “The Strategic Implications of Blockchain” to undergraduate students on the four year Batchelor of Business Administration course, run by Jamie MacAlister. Together we prepared a lecture that aimed to be factual, engaging, cautionary and encouraging.

Al first covered “How does it work?” followed by a section on the volatile history and colourful characters of Bitcoin and blockchain technology. David then explored the strategic angles and industry use cases. Our first lecture had to compete with the news just an hour or so earlier that President Trump had been elected but despite that, the students were attentive and a pleasure to talk too. Several were already well versed in this area and asked searching questions, while others were clearly clicking through the possibilities for innovation in their mind.

Hult has a reputation for producing entrepreneurs and that was evident in some of the discussions both during and after the lecture sessions on the economics, research and opportunities in this field. Jamie astutely framed the day when he coined the question “What is the cost of trust?” – future research for the students perhaps?

More Projects Successfully Delivered

CBoxx are pleased to announce that two more significant UK financial services upgrade projects, supported by CBoxx consultants, have gone live recently:

Origo Options Service Upgrade

The market leading Origo Options Transfers service has just had a major update to bring it in line with the latest UKFMPG Market Practice for Re-registration using ISO 20022 messaging over the Swift network plus the rollout of a set of new features and enhancements such as:

  • The incorporation of intermediate unit holders (third party administrators) into the re-registration process;
  • Support for a broader product range, including pension wrappers;
  • Wider coverage of asset types;
  • Richer data capture.

CBoxx played a key role in analysis, design and development for this project; utilising our in depth knowledge of the industry market practice and ISO20022 messaging standards to ensure that the business process and message workflows conformed to market practice, whilst designing and presenting a concise, informative, easy to use user experience.

Upgrading St James’s Place Wealth Management to Time4Advice CURO 2v0

CBoxx provided Agile project management services to Time4Advice for the delivery of a project to comprehensively upgrade the St James’s Place Wealth Management CURO CRM system. SJP are a leading FTSE 100 UK wealth manager with over £70 billion funds under management. CURO is a financial advice specific customisation of Microsoft Dynamics CRM used by an ever increasing proportion of the SJP adviser network, known as the Partnership. The year long project delivered:

  • An upgrade of the underlying Microsoft Dynamics CRM 2011 to the very latest, cutting edge CRM 2016 version;
  • This required upgrading, with no data loss or degradation of working hour services, through three intermediate versions of Dynamics;
  • T4A worked closely with SJP UX specialists to deliver a fresh new UX design that was incorporated across the whole system;
  • All SJP systems integrations were fully upgraded and tested;
  • Functional enhancements were designed and delivered across the system;
  • T4A also worked closely with SJP business systems to deliver a whole new set of scalable, performance tested, secure, cloud based production and test environments on Amazon Web Services (AWS).

CBoxx provided Agile project management services from the initial scoping phase through delivery of every phase of work to the live launch process and then post implementation support. Essential to the success of the project was fostering close communication between all project stakeholders throughout, coupled with thorough but flexible planning and the maintenance of detailed records of all works conducted. Technically, the massive volumes of data involved and links to critical systems required extremely careful testing, attentiveness to data security and risk management throughout.

CBoxx in Money Marketing magazine

CBoxx MD Alan Sherriff took time out from his projects to make an appearance in Money Marketing magazine in July, to write about our 2016 technology research theme: blockchain (distributed ledgers): “The revolutionary technology set to power the advice boom”

This article was based on our futurology whitepaper that you can read here: Financial Planning: An Optimistic View of the Future

Blockchain White Paper on the Future of Financial Planning

Based on our collaborative research in 2016, CBoxx and OCP have co-authored a new white paper that offers an optimistic glimpse of the future for financial planning with particular focus on the possible effects of blockchain technology on the underlying investments industry stack.

We begin with a “Day in the Life” of Fara, a young financial planner in the 2020’s, followed by a broad outline of how the industry could evolve to that point from today …

CBoxx OCP White Paper Financial Planning Optimistic Vision of Future v10

A fresh start and a new direction for CBoxx in 2015

Welcome to the brand new CBoxx website. After spending the last few years completely engrossed in some rather complex projects for Origo and Time4Advice (and their client St. James’s Place) we’re now taking a little time to look up from the laptops and refresh ourselves.

At our slightly belated 10th birthday celebration meal, the directors decided it was time for a change and that change is taking shape now as we are updating our systems and reviewing what we have really excelled at over the years – which is delivering projects.

We have worked on many different projects since 2003, all within UK Financial Services. Some have been commercially successful and some not. One very consistent pattern that we can now recognise is that when CBoxx get hold of an IT project, it gets done, without fail!

Over 2015 we are therefore shaping our Project Delivery Services into a packaged proposition and taking that out to a wider audience. Do of course get in touch if you need our services …