David Sullivan, Vice President of Regional Application Development Planning & Effectiveness at MetLife, examined blockchain technology during his keynote address to Argyle’s CIO membership at the 2017 Technology Innovation & Security in Financial Services Forum in New York City on September 27. In his presentation, “Blockchain & Its Impact on Financial Services,” Sullivan described how blockchain works and why financial services professionals should leverage this technology.
According to Sullivan, blockchain offers a distributed ledger that keeps a record of all transactions. It provides a secure, shared database that empowers financial services professionals with the ability to track data and activities without putting their sensitive information in danger.
Although many companies are looking to blockchain to solve myriad information security challenges, it is important to note that this technology is not an all-in-one solution. Instead, businesses must develop and update a blockchain system over time to ensure optimal results.
“You can’t just put in a system of blockchain and expect to fix problems,” Sullivan noted. “You’ve really got to work through the system and put different layers in place over time.”
With blockchain, multiple parties must work together to share and protect information. Blockchain systems require financial services professionals to be open to collaboration. At the same time, financial services professionals must trust the systems to safeguard their sensitive information at all times.
“The only way that a blockchain works is if everybody believes it is a trusted source,” Sullivan said. “You’ve got to open up some parts of the system. This doesn’t mean you’re giving up your keys to the kingdom or exposing your company, but you need to understand this is a trusted environment.”
How a blockchain system is managed may vary, and there is no surefire solution that works for all systems.
“Blockchain is one of a number of technologies … that are really, really critical and are all part of a distributed ledger that are going to make things run better for businesses.”
In some instances, a group of financial services professionals may work together to manage data stored on a blockchain. Or, a blockchain may be used across multiple departments within a company.
A blockchain should always be managed by multiple parties, Sullivan indicated. That way, an organization can drive accountability and minimize information security dangers.
“The way that blockchain should be governed is not by any one body,” Sullivan stated. “Governance requires support from a broader group. And in some cases, governance can be virtually open-source.”
Blockchain has no single point of failure. As such, it delivers advanced security for financial services professionals who must comply with various information security mandates.
Furthermore, blockchain requires an industry-wide commitment to achieve long-lasting success.
If companies start implementing blockchain systems today, they can secure their sensitive data, as well as encourage regulators to embrace blockchain for unparalleled information security.
“There are regulators now that are starting to embrace [blockchain],” Sullivan said. “[Some regulators] are going all-in on blockchain and using it to do the regulatory aspects of their day-to-day work better and faster.”
As more companies integrate blockchain into their everyday operations, these businesses may rely heavily on this technology for information security. However, it is essential to note that blockchain is one of several technologies that businesses should deploy as part of a successful information security strategy.
“The only way that a blockchain works is if everybody believes it is a trusted source.”
For example, artificial intelligence (AI) and machine learning tools may be deployed in conjunction with blockchain to help businesses protect massive amounts of structured and unstructured data. New technologies also may become available to help companies quickly and effortlessly bolster their information security efforts.
Businesses must look closely at blockchain and other information security technologies to determine which tools can help them achieve their immediate and long-term goals. By doing so, companies can implement state-of-the-art information security technologies to safeguard their sensitive information, along with drive increased productivity and efficiency.
“Blockchain is one of a number of technologies … that are really, really critical and are all part of a distributed ledger that are going to make things run better for businesses,” Sullivan said.
As a company grows, blockchain is scalable. This means that a company can implement a blockchain system and update this system to accommodate business expansion over an extended period of time.
“You can create an environment that is going to be absolutely successful in terms of scale with blockchain,” Sullivan pointed out. [Blockchain] is absolutely going to be a game-changer.”
With blockchain in place, companies – regardless of their size – can simultaneously reduce information security dangers and improve their day-to-day operations. As a result, businesses that use blockchain systems may be better equipped to drive long-lasting growth.
“We can have shared records that we can trust and believe in,” Sullivan stated. “[Blockchain] is a big opportunity for all of us to think about how we can change our companies.”
David Sullivan is Global RAD Vice President of Planning and Effectiveness at Metlife managing an international team and is responsible for portfolio management and technology planning aligning with the RAD strategy, demand and resource management, knowledge management, and monthly operating reviews. Prior to MetLife, he was a Director at Citigroup with roles in Global Transaction Services (Citi for Cities program with a specific focus on the city of New York) and Strategy and Planning for Operations and Technology. Prior to joining Citi, David was an Engagement Manager with Parson Consulting where he worked with clients to reengineer financial operations and systems. David began his career as an entrepreneur with a technology consultancy implementing trading floors and software deployment systems for Financial Services firms.
Outside of work, David is an active participant with the Juvenile Diabetes Foundation and Junior Achievement.
David has an MBA in Finance from Seton Hall University and BS in Industrial Engineering from Clemson University.