Towards ambient accountability in financial services: Shared ledgers, translucent transactions and the technological legacy of the great financial crisis

Abstract

The consensus in the finance sector seems to be that the shared ledger technology behind Bitcoin, the ‘blockchain’, will disrupt the sector,1 although many commentators are not at all clear how (or, indeed, why). The blockchain is, however, only one kind of shared ledger and the Bitcoin blockchain works in a very specific way. This may not be the best way to organise shared ledgers for disruptive innovation in financial services. So what is? And why would financial services organisations want to exploit shared ledger technology? This paper sets out a simple shared ledger taxonomy and layered architecture designed to facilitate communication between technologists, businesses and regulators in the financial services world, and explains why the various forms of shared ledgers might be attractive to financial services organisations, borrowing the phrase ‘ambient accountability’ from architecture to suggest a new way to organise a financial sector.