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Private Blockchain for Insuring & Regulating Community BanksEasing compliance and securing data while driving further innovation
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Challenges Facing the Agencies Insuring Community Banks
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Problem: The rapidly changing financial landscape may not adequately be addressed by the existing regulatory policies, procedures, and resources.
Problem: Costs for compliance have greatly increased due to immense and conflicting regulations.
Problem: Cybersecurity and data protections risks are not yet well understood, managed or mitigated in the fast-changing financial technologies (FinTech) environment.
Problem: When policy comes from US Congress it takes time to the Agency to put it in a useable format.
Problem: The increasing number of crypto banks and banks holding cryptocurrencies and how to handle them.
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Solution
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Private Blockchain Framework to Boost Efficiencies, Overcome Security Risks, and Drive Innovation.
Private Blockchain Framework
TransparencyAccess to real time institutional data.
Lower CostsAutomated audits.
Data Driven OutcomesReal time data leveraged for
SupTech tools.
Smart ContractsAutomate payments
Reduced FraudImmutable data and
traceability
SecurityBuilt in Cryptography
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Solution – Mutual Visibility and a Policy Compliant Data Structure
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Establish a central infrastructure and data structure to aid in meeting compliance guidelines.
Tie the Agency’s infrastructure into community banks, cryptocurrency banks, and banks with cryptocurrency holdings and build the tools to review the data.
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Insuring Agency
Private Blockchain
Community Bank A Community Bank B Crypto Bank A Crypto Bank B
Provides Oversightand
Ensures Compliance
Access to data Access to data Access to data Access to data
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Solution - Secure Real-Time Data as a Foundation for Automation
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Agency Oversight
Polic
y Co
mpl
iant
Infr
astr
uctu
re a
nd D
ata
Private Blockchain
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Solution – Speed to Get More Done with Fewer Resources
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FastContracts are run on software code
and not processed manually.
RecordedPermanently
stored for future records.
Automated tasks/processes a.k.a. “Smart Contracts” to gain efficiencies on the DLT blockchain. Reduce cost of audits and oversight. Automate processes like claims handling and customer repayment. Reduce the level of effort and allow the Agency to focus personnel on other tasks.
AccurateAll terms and
conditions recorded in detail.
SecureUtilize data encryption.
TrustedTransparent,
autonomous, and secure.
TransparentVisible and
accessible to all relevant parties.
Low CostEliminate the need for intermediaries.
Smart Contracts
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Solution – Reduced Risk
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Blockchain will provide security at the infrastructure level.
Let the data stay on the blockchain at the bank level. The analysis would be at the source on encrypted data and the data does not need to be brought over to the Agency for analysis.
To be better prepared for the yet to be known cybersecurity and data protections risks it is important to secure data at the data level. We recommend the following:
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HomomorphicEncryption
DifferentialPrivacy (PII)
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Leveraging Emerging Technologies for Automation
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The private blockchain is the foundation that can be used to drive further innovation utilizing other emerging technologies.
Real time, transparent, and secure data to supercharge automation and artificial intelligence.
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Benefits
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Establishing a private blockchain framework with community banks will provide transparency to institutional data that will limit onsite examinations and allowing the Agency to develop additional monitoring tools such as:
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Exceptions-based supervision
Automated checks on institution data;
automatically collected and analyzed; identified
by expected behavior parameters and trigger
supervisory action.
Automated supervisory measures
Capital increases based on automated analysis and decision-making.
Algorithmic regulation and
supervision
For high-frequency trading, algorithm-
based credit scoring, any service that
automated decision making.
Dynamic, predictive supervision
Preemptive supervisory actions based on
predictive behavioral analysis. (machine
learning)
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Benefits
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In conclusion:− Mutual visibility and a policy compliant central infrastructure and data structure.
− Secure real-time data as a foundation for automation
− Smart Contracts - speed to get more done with less resources
− Risk Reduction - data does not need to be brought over to the Agency for analysis
− Blockchain as a foundation for further innovation.
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Thank you for your Time
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Please refer any questionsyou may have to:
Mr. Tom [email protected]
or
Mr. Robert [email protected]
Important
The material in this presentation has been prepared by Jacobs®.
©2021 Jacobs Engineering Group Inc. All rights reserved. This presentation is protected by U.S. and International copyright laws. Reproduction and redistribution without written permission is prohibited. Jacobs, the Jacobs logo, and all other Jacobs trademarks are the property of Jacobs Engineering Group Inc.
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Copyright Notice
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