Uses of distributed ledger technologies to drive efficiency programs and risk management considerations

Uses of distributed ledger technologies to drive efficiency programs and risk management considerations

By Mariana Gomez de la Villa, Head of Wholesale Banking Blockchain, ING

Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I have joined ING in 2015 and am currently the Distributed Ledger Technology Program Director at ING, with overall responsibility for driving research, development and implementation of Distributed Ledger Technology as well as capitalizing on its potential in order to unlock mass-scale value.

Our team has delivered over 44 proofs of concept and 8 live pilots in collaboration with the following business areas: payments, trade finance and working capital solutions, financial markets, post-trade, bank treasury, lending, compliance and identity.

What, for you, are the benefits of attending a conference like Risk EMEA 2019 and what can attendees expect to learn from your session?

I believe that attending to Risk EMEA 2019 can help to raise awareness on the potential of distributed ledger technology and provide knowledge on the potential benefits of this technology.

The audience will learn from our session how DLT will impact risk management, how we are levering the potential of this technology and discover how it is going to improve traditional systems efficiency in certain situations.

For our readers who are less sure, could you provide an overview of what DLT is and the opportunities it could present for financial institutions?

Distributed ledger technology (DLT) is a digital ledger recording transactions (can be any valuables) and synchronized among network members. A consensus mechanism allows to verify the transactions and remove the need of a trusted third party.  Information stored in DLT are time stamped and immutable. For financial institutions, DLT could simplify operational efforts, reduce counterpart risk, improve regulatory efficiency, minimize fraud, provides more liquidity alternatives and ensure transparency into sourcing of liquidity for assets…

In your opinion, how can we look to effectively organise different companies within decentralised application?

More and more decentralised applications are being built on DLT, however not everyone will use the same applications or the same ledgers. Therefore, we need to look at the interoperability between all these solutions. To transition towards a distributed economy, the different solutions should be able to communicate and interact together.

What are the key GDPR considerations that need to be in terms of global consensus blockchain?

Global consensus in blockchain needs to take into consideration two main GDPR requirements : the right to be forgotten and privacy.

The right to be forgotten has to be taken into account as the recorded information in a DLT is supposed to be immutable making the deleting of data impossible.

While DLT can also allow help to give users more control over their own data, consensus mechanism usually share information to all the network members to verify the validity of  transactions making public sensible information that should not be disclosed to other users.

What challenges and opportunities could financial institutions face when driving efficiency programs?

DLT is a recent technology making difficult to attract the few talents with adequate skills. The regulatory framework is also blurred about DLT application.

How do you see the impact of distributed ledger technologies evolving over the next 6-12 months?

Distributed ledger technologies will be used in more and more use cases over this year.

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