In this edition, we’ve added a delightful splash of compliance and regtech (regulatory technology) news to our already punchy cocktail of blockchain business and data innovations.
The inclusion of regtech marks the launch of LogLocker, a new from ByzGen tool that builds immutable and defensible data-backed proof for regulated businesses with complex data ecosystems. It’s a tool guaranteed to soothe the nerves of even the most frantic compliance teams.
Cheers to that!
In this newsletter:
Data stored about individuals can be considered both advantageous and challenging for businesses. The more detailed the data, the more opportunities arise to gain valuable insights for enhancing marketing strategies, improving customer service, and predicting the future. However, increased data granularity has also drawn the attention of regulators, who are concerned about businesses retaining and using data for longer periods and for purposes beyond the original intent. Sometimes the devil really is in the detail…
If your business prizes granular data for its insights, and regulators prize consumer protection, how should compliance teams navigate this complex issue?
Data minimisation is an approach to data governance that has the potential to help businesses clean up data, reduce storage costs and please regulators by ensuring that data has a use-by date and that data is captured and stored only when necessary and to an agreed standard.
Compliance teams can take the lead in this approach by working with data users to identify their needs and using new regtech tools that allow for logs of data and events to be created rather than archiving entire datasets.
The upside? Cleaner, standardised data is what AI, data scientists and analysts all crave, opening the way for innovation. LOGLOCKER
Technology can transform compliance management by enabling companies to streamline processes, automate tasks, and gain valuable insights. Data-driven compliance monitoring allows organizations to proactively identify and address compliance issues, reducing the risk of legal and ethical violations.
Additionally, technology helps organizations manage and analyze data more efficiently, enabling informed decision-making.
As technology advances, companies like AB InBev are at the forefront of leveraging these tools to ensure compliance in an increasingly complex business landscape. LATIN LAWYER
The RegTech industry faces increasing challenges such as significant cost, data complexity and authenticity issues. Blockchain technology, backed by systems like FALKOR, offers potential solutions by providing a transparent, shareable and immutable record of data and transactions. This can enhance compliance capabilities by reducing costs, tackling complexity and improving the defensibility of data sources. BYZGEN
Nobody wants a compliance investigation, but when it happens, you’ll want to know you’ve got data you and the regulator can trust.
Blockchain's decentralised and immutable ledger ensures data integrity and the admissibility of evidence in legal proceedings. It also provides a transparent platform for document verification and a record of transactions, aiding in fraud cases. Blockchain's cryptographic algorithms and decentralised nature also offer a robust framework for data security.
Tools like ByzGen’s LogLocker solution can ensure efficiency, security, and reliability in investigations whilst respecting location-based requirements and facilitating collaboration with third parties. LOGLOCKER
In May 2021, a ransomware attack on Colonial Pipeline highlighted the importance of cybersecurity in critical infrastructure. The incident led to gas shortages in the eastern US, economic turmoil and an upsurge in interest in protecting critical infrastructure from digital attacks.
However, in common with many data and tech issues, cybersecurity should not be seen solely as a loss avoidance measure but as a value generator that builds trust. Companies with strong cybersecurity measures can enhance their reputation and enable innovation.
The energy sector, in particular, has an opportunity to view cybersecurity as a core feature that adds value. Modern energy systems, which rely heavily on digital components, are vulnerable to cyberattacks that can have real-world consequences. Therefore, strengthening cybersecurity is crucial for protecting these assets and ensuring uptime.CROWDFUND INSIDER
While some scepticism exists regarding the tech industry's ability to self-regulate, four influential companies in the field of artificial intelligence have come together to form the Frontier Model Forum, a new industry body dedicated to ensuring the safe development of advanced AI models.
OpenAI, Anthropic, Microsoft, and Google subsidiary DeepMind are the founding members of the forum. The group's focus is on the responsible development of frontier AI models which surpass the capabilities of existing models. The forum also promises to integrate what they recognise as important contributions from entities like the UK government and the European Union, which are actively working on AI safety and regulation.
The forum has already set out several key objectives, including promoting research in AI safety, establishing standards for evaluating models, encouraging responsible deployment of advanced AI models, engaging with policymakers and academics on trust and safety risks, and exploring positive applications of AI, such as addressing climate change and detecting cancer.
This announcement comes whilst efforts to regulate AI technology are gaining momentum and independent researchers have expressed concerns that governments have relinquished leadership in AI to the private sector.
For us and other industry commentators, a key question remains unanswered - who is ready and able to effectively represent the interests of people, economies, and societies impacted by AI?
The establishment of the Frontier Model Forum may reflect industry leaders' growing recognition of the need for responsible and safe development of advanced AI models. However, we and others believe that wider collaboration and oversight will be crucial in addressing the challenges and potential risks associated with AI technology. THE GUARDIAN
The recent turmoil in cryptocurrency markets and subsequent regulatory crackdowns have diminished the appeal of cryptocurrencies as a means of value exchange. Still, that has left room for refocusing industry interest on the value of crypto’s underpinning architecture, blockchain, as a basis for building trust in data ecosystems.
The collapse of FTX in November 2022 marked the end of a year of crisis in crypto markets, leaving a lasting negative impact. While blockchain technology gained mainstream attention in 2021, attracting celebrity endorsements and significant investments, last year saw a decline in investor enthusiasm and a reevaluation of cryptocurrencies.
This hasn’t overshadowed positive developments in blockchain as infrastructure, such as the London Stock Exchange Group’s work on an "end-to-end" blockchain solution for asset trading. More recently, observers have suggested that blockchain’s break into established finance has been hindered by advancements in artificial intelligence, which is gaining both attention and traction in the sector.
However, as banks step up their use of AI to combat scams and fraud, AI's impact on traditional banking creates fresh demand for blockchain solutions.
Trust is at the heart of concerns about AI, and this is where blockchain shines, for example, by providing an immutable and defensible record of how data has been processed and used by AI. This is the spur for blockchain’s growth for the long term in the finance sector, with use cases also including compliance and security enhancements. FT.COM (paywall)
See you then,
The ByzGen Team
Marcus, Terry, Shristy, Rob and Ryan