“Distributed ledger technologies such as blockchain can help organizations and their activities become more mature, resilient, and transparent,” says André Meyer (Security & Cyber Defense Lead at Accenture Luxembourg). Business leaders need to understand that by sharing their data with competitors they will secure their value chain and make cost and time savings. Moreover, sooner or later, they will have to shift… Otherwise, they risk missing the boat.
Image Credits: Marion Dessard / Silicon Luxembourg
The fifth key trend in Accenture’s Technology Vision 2021 highlights the fact that we have arrived at a moment of truth. The adoption of digital technologies accelerated during the pandemic when companies realized they could not navigate disruption alone. Chief among them, Multiparty Systems (MPS), a variety of technologies and capabilities that enable individuals and organizations to share data securely.
The MPS family includes distributed ledger: a database that is replicated, shared, and synchronized across multiple sites, institutions, or regions and that is accessible by multiple people. There is no central administrator. It requires a peer-to-peer network and consensus algorithms to ensure replication across nodes. Those nodes contain a full copy of the information, which is organized in blocks and included in timely order into the system, which operates as an accounts book. Any changes or additions to the ledger are reflected and transmitted to all participants (the witnesses), who can access the recording and own a copy of the information. Blockchain is a form of distributed ledger.
Stronger and more resilient together
For André Meyer, Security & Cyber Defense Lead at Accenture Luxembourg, MPS can help organizations to protect their business and build greater resilience: “In a centralized system, your supply chain is more prone to cyberattacks and fraud because it has a single point of failure,” he explains. “When that happens, your business may find itself on the brink of collapse. It’s the domino effect: every part of your business will fail in succession.”
By contrast, distributed ledger technologies allow a community of users to operate together in a cooperative way. “It’s a real ‘We’ approach,” Meyer notes. “All the peers in the network are in the same boat: they share their data with each other. They all see when someone faces a problem, and they can all help. This builds collective resilience.”
For Meyer, such an approach also helps organizations to boost their business transparency because all the peers in the network are public witnesses and can validate and confirm every operation and transaction made through the system: “It is definitely an effective anti-fraud solution, which benefits companies in terms of security, time and money,” he says.
From Me to We in Luxembourg
Luxembourg’s financial services sector has already adopted the MPS approach. In 2019, the country passed a new law allowing the use of secure electronic registration mechanisms for the issuance and circulation of securities, through distributed ledger and blockchain.
“Blockchain is used in retail banking and by the whole finance industry, including investment, asset management and service activities,” Meyer explains. “And in the payment chain, many consumers use a LuxTrust token and applications such as Apple Pay.” The Grand-Duchy is also well positioned in other financial segments, such as data distribution, with big players like a Luxembourg-based company positioned at the forefront of the industry in Europe via its distributed ledger-based securities and settlement services.”
However, other sectors are only shifting now to the ‘We’ approach: “For example, we see some companies in the manufacturing industries, which are the most likely to face cyberattacks, starting to turn to MPS solutions,” Meyer observes. To do this, they first need first to automatize their processes and machines: “Automation is the baseline and building block prior to moving to blockchain,” Meyer explains. “Blockchain requires a certain technological maturity. Once they have adopted the right mindset and streamlined their processes and machines, they can start pushing their assets into a distributed ledger system,” he adds.
Data sharing as insurance for the future
“In a world where people and companies are starting to work in a more collaborative and distributed way, the technology will follow. Organizations can no longer operate as centralized infrastructures if their workforce, suppliers, clients and machines are fully collaborating in their activity.”
The main challenge is explaining how multiparty systems work and the benefits they offer to businesses. “Distributed ledger and blockchain are still too complicated for many leaders,” he regrets. “I understand that it might be a huge cultural shift to understand and accept that sharing your business data with competitors will secure your value chain and bring cost and time savings. But sooner or later, leaders will have to shift, otherwise, they will miss the boat.”
