What does Blockchain have to do with Information Governance?
Information has become a strategic business asset. Forward-thinking organisations are demanding more than a collection of fragmented and operational approaches to the way this information is managed and governed. Instead, they require a holistic and strategic approach that better supports their need to maximise the value of information and minimise its risks.
Information Governance has emerged as a consolidated and strategic framework that meets this need. Information Governance both unites the disciplines focused on data and information, and provides strategic and executive focus to the value and cost of this information. It also allows boards and executives to better understand the value of information within their organisation, and to see how investments in technology align to strategic priorities.
The increasingly large stores of data, and the potential to extract value from them, represent a tremendous opportunity for business. However, this also presents significant challenges. Dealing with these challenges (cumulatively) now exceeds the capabilities of traditional methods of information management and the traditional approaches to the various facets of Information Governance such as:
- Information Management
- Records Management
- Data Governance
- Data Analytics
- Risk and Compliance
Information Governance is a strategic, top-down approach to managing all aspects of information within the organisation, in line with the strategic objectives of that organisation. It:
- Provides the framework, systems and processes for ensuring the value of information is maximised and risks are minimised.
- Looks at all information, regardless of its format. This includes structured information such as databases and unstructured information such as documents and emails.
- Includes both internal and external stakeholders, including internal users of data, information professionals, risk and compliance teams, executive and board members, and legal and regulatory bodies.
- Is a subset of Corporate Governance – it is a strategic rather than tactical discipline, which aligns information management with business strategy and processes.
The Information Governance Initiative (IGI) defines Information Governance as: “the activities and technologies that organisations employ to maximise the value of information while minimising associated risks and costs”.
The new technology platform, Blockchain, provides us with an opportunity to reassess how we leverage the technology component of this equation particularly in the areas of Privacy, Records Management, Information Management, and Cybersecurity.
One of the challenges of our time is that the architecture of the Public Internet and our desire for privacy are totally incompatible. This becomes more obvious with each reporting of the latest data breach, whether that be exposure of confidential medical information or release of our bank details after submitting a job application. The Internet operates as a giant copy-and-paste machine—copying information from one computer and pasting it to another when transferring data.
When we share our vital information such as our name, date of birth, address, and health care number, that sensitive data is passed to the third-party companies that require it. This creates two additional problems: We have to repeatedly fill out forms every time we interact with a new organization, and the firms that make copies and store our information in centralized databases are easy targets for hackers.
- Transparency of data
- Data is tamper-proof
- Mitigation of risk in transaction
- Creation and Management of Digital identities
Blockchain started as the system designed to manage bitcoin transactions. It can be thought of as the next generation of a digital operating system, redefining technology systems architecture at every level infrastructure, networks, applications, data, interface, device, security, and identity.
Blockchain is a decentralised, global network of computers using distributed records to manage transactions. It operates as a distributed system of nodes where trust is managed across the nodes and not by any one central authority. Records are bundled together into blocks and added to the chain one after another. The record can be any information, a deal for example, the block is a bundle of records and the chain is all the blocks linked together.
A blockchain can be explained as a database that is shared across a network of computers. Once a record has been added to the chain it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks.
Beyond the initial use to manage cybercurrencies such as bitcoin, many other possible uses are emerging. Ledger assets can be anything that is relevant to proving a record of ownership and a value chain. Private blockchains control who can operate a node and how the nodes are connected to one another. They have become the preferred system for businesses developing blockchain applications.
Globally there is an explosion of practical solutions being developed leveraging blockchain technology based on the following use case scenarios:
- Movement of assets – trade settlements, transferring payments, and supply chain tracking.
- Secure sharing – health records, valuable datasets, classified information, private collections, and archives.
- Verification - licences, proof of records, transactions, titles, wills, processes, and events.
- Ownership - registries, titles, and chain of custody for a physical asset, e.g. real estate.
- Identity management - e-identities for secure digital services such as voting, tax returns, and travel documents.
As an example, we can all relate to the scenario of buying a home. We are already seeing the use of blockchain-based real estate solutions to address the purchase contracts, mortgage and title registration steps of the cycle in some parts of the US. Here is how a deal is included in a blockchain:
A trade is recorded, Mr. Jones is selling his house to Mr. Bond for $200,000.
- The record lists the details, including a digital signature from each party.
- The record is checked by the network. The computers in the network, called ‘nodes’, check the details of the trade to make sure it is valid.
- The records that the network accepted are added to a block. Each block contains a unique code call.
- The block is added to the blockchain. Hash codes connect the blocks together in a specific order which is very difficult to change.
A hash code is created by a mathematical function that takes digital information and generates a string of letters and numbers from it. The hash function will always generate a code of the same length regardless of the size of the original file. Any change to the original input will generate a new hash so if anyone decided to delete just one thing in the original input, such as the price, the hash code would change. The next block in the chain still has the old hash, so to restore the chain a hacker would have to recalculate that and so on. Recalculating all those hashes would take an enormous amount of computing power.
Unlike traditional ledgers, a blockchain database is decentralised. In a centralized network authority is held by a central node. In a decentralised network all the nodes can access the information and compete and be the next to add to the database.
Without centralized control of a network, trust could be a problem. To resolve this and build trust, blockchains set tests for the computers that seek to join and add records to the chain. The tests are called consensus models.
Information Governance and Blockchain
Information Governance (IG), including Privacy, Cybersecurity and Records Management is a natural fit for blockchain technology because these facets value data based on its authenticity, integrity, and reliability. Any potential blockchain application would need to be flexible enough to meet the needs of enterprise users. In addition to managing records through their lifecycle, a blockchain solution for IG would need to be economically feasible and integrate with normal business operations and existing systems. It would also need to provide identity management from a privacy perspective and be secure against cyber threats. Blockchain is an important technology for records management professionals to understand because it has broad implications for securing and authenticating intellectual property at lower cost and higher efficiency.
The public-private architecture of a blockchain can clearly define and improve the privacy of data in a digital format online. Blockchain technology can create counterfeit-proof information on a network we can trust. Instead of sharing our date of birth again and again, we have one permanent record of this information on the blockchain and then give temporary permission to access the official record when needed.
In such a system, public information such as tax records, government records, and local school budgets can remain public while the private data of citizens and corporations can be private and secure.
This approach could totally change the current digital economy globally. Today, we give away our data to companies like Facebook for free, and they monetize that information without sharing their revenues. In a blockchain system, your data is your own and only you have the private keys and ability to access this information. This would enable you to share and monetize that data as you wish.
This new concept of each of us owning and controlling our personal data ecosystem could rapidly emerge with the uptake of more ubiquitous blockchain solutions. Blockchains can operate in the public domain, or, as private (member only) peer-to-peer networks. Theoretically, it is impossible to breach this system of trust as multiple parties would need to allow access for a violation to occur. This will drive redundancy for business models of internally controlled systems, with data transferred from party to party along a transaction flow.
Blockchain’s decentralized approach to cybersecurity can be seen as a fresh take on the issues that the industry faces today. The use of blockchain may yet address the vulnerabilities and limitations of current security approaches and solutions.
The range of the new services provided by Blockchain may be limited for now and of course they face incumbent players in the cybersecurity space. This only offers further opportunity for other ventures to cover other key areas of cybersecurity. Blockchain also transcends borders and nationalities, which should inspire trust in users – and, with the growth of these new solutions, the industry may yet restore some of the public’s trust they may have lost.
Overall, blockchain technology is a breakthrough in cyber security, as it can ensure the highest level of data confidentiality, availability, and security. However, the complexity of the technology may cause difficulties with development and real-world use.
One of the central features an IG blockchain solution would need is the ability to track changes to records through their lifecycle. In IG, the issue of whether a document is an original or an altered version can be crucially important. Uncertainty often leads to business disputes or litigation. Forensic techniques can be used for paper records, but proving that an electronic document is an authentic, unaltered original presents an even greater challenge. Blockchain provides the solution.
Blockchain doesn't apply just to documents, it can be used with any kind of digital asset, such as images, video files and email backups. Blockchain is becoming particularly popular in intellectual property businesses. For example, professional photographers can use it to manage licensing rights to their creations and even to enable royalty payments.
Blockchain can provide absolute proof that a digital transaction is authentic and unaltered via mathematical algorithms. For example, “transactions” on a document could track incremental changes and revisions. Every time new information is added, it forms a new block in the chain. Once entered onto a blockchain ledger, transactions become irreversible and indisputable, and so do the records to which they relate. This renders it impossible to tamper with or make secret alterations to the records.
Blockchain and Business Benefits
There are a number of business drivers that will facilitate the development and uptake of Blockchain solutions:
- Cost savings. Because blockchain transactions don't require intermediaries, processes can be made more efficient and less expensive. There's no need for auditors or legal professionals to validate the authenticity of information, so those costs come out of the process.
- Efficiency. Fewer people means faster turnaround. Transactions that might currently take days can be concluded in seconds.
- Security. The fewer participants there are in a transaction, less risk there is that something could go wrong. Handoff points are a prime vulnerability, and blockchain effectively eliminates them.
- Flexibility. Any digital asset can use blockchain, including difficult-to-protect items like multimedia and email records.
- Competitive advantage. Companies in the intellectual property space can consider using blockchain to offer new services that benefit both buyers and content creators.