TDE – Economic Applications
In our last blog post, we talked about the creation of value by curating data and imbuing it with integrity. Now we aim to explore actual economic applications and how their data exchanges benefit from being trusted.
TDE for IoT
With digitalization came the Internet of Things, a system based on M2M communication, reliant on the creation, collection, and processing of massive amounts of data. Many industries have been revolutionized and more than a few have been cannibalized. The greatest factor for this is the exchange of data between interacting parties.
This interaction can be exemplified best with the supply-chain of a product. In a full supply-chain there usually are several parties that interact with each other and rely on the previous party to correctly supply them with the necessary information. Here it is of utmost importance to find a way to clarify the integrity of the data transmitted due to the risk of taking the blame in case something goes wrong.
Moreover, looking at new smart energy models that introduce the ‘prosumer’ (a party that is producer and consumer at once) are reliant on high process velocity to be effective. To not stifle transactions, there needs to be a parallel process to the transaction that verifies the integrity of the data supplied, to preemptively eliminate the possibility to decelerate business transactions through uncertainty.
Lastly, the trusted exchange of data is of high importance to InsurTech (a sub-segment of FinTech). Through new technologies insurance companies are being forced to rethink their business models.
Predictive maintenance, an IoT technology, for example, changes the calculated risk and makes it, as the name implies, predictable. Hence the company operating a machine wouldn’t need to insure against unwanted/unplanned downtime as every downtime can be predictable, hence the company can see that the necessary downtime is not during high-demand hours, or they find for the time period an alternative.
By being able to predict the risk it can be effectively mitigated before it occurs. This means that risk-based businesses such as insurance are losing their value. These technologies, however, rely on the data that they are provided with, and if the data has been falsified by human error or fraudulent malice, the technology will fail and predictions won’t be accurate, incurring costs of unplanned downtimes and more.
Technology providers for data-based analytics or AI to support or even autonomously make decisions need to be sure of the integrity of data their software was provided with. This exchange of data also needs to be trusted.
- Exorbitant amounts of data that need proof of integrity
- High possible reward from data analytics
- Wrong or tampered data may have a huge negative impact on business
TDE for FinTech
Diverting from the previous environment of IoT but staying in the field of FinTech, there are many applications in need of trust between parties.
Financial companies have already turned to digitalization for increased business velocity to support more transactions at higher rates and precision.
Assets that are digital or for business purposes expressed that way, change owners every day. A perfect example is online instant payment methods, such as PayPal or Zelle, the latter already suffering from hacks that led to many users losing money. Zelle alone processes transactions worth around $119 billion in 2018. Transactions need to be trusted and fully auditable so that every user and every organization can be saved from malicious action.
The importance of data integrity for a trusted exchange of data for financial transactions, becomes glaringly obvious when examining the amount of wealth at stake and the increasingly powerful attacks on, often under-secured but convenient and easy, payment methods.
Because of the need for trusted facilitators to manually settle cross-border transactions and perform reconciliations, service delivery is slowed even though the internet has made the flow of information fast. This means that embedded data integrity might enable the automatic fast flow of information.
- High-value trade needs data integrity the most
- Massive amounts of transactions make high business velocity difficult to achieve
- Data tampering has become a growing and pervasive issue
Read the entire whitepaper “Trusted Data Exchange – Business acceleration in the digital age” here.