Test 25 July, 2017

Public services in blockchains VI: identifying opportunities for use

Digitisation is on the government’s agenda. As Reform and Accenture have recently highlighted, for example, the UK border stands to become more efficient and secure using e-gates and iris scanning. The Government backs this. One radical technology identified as contributing to this is blockchain – a highly secure, non-centralised record of transactions.

Blockchain is gaining attention in the public sector due to its potential to disrupt the way services are delivered, breaking silos and increasing efficiency. Some of the most advanced experiments and applications across government are with Estonia’s e-services and Dubai’s ambition to provide all public services via blockchain by 2020.

Blockchain is a distributed ledger technology. This means the data are not stored in one central database, like traditional technology architectures, but rather held securely across a distributed network. The blockchain validates and agrees if new transactions are recorded on the ledger providing a consensus across the network, against a set of pre-defined rules. The blockchain ledger stores a transparent and an immutable record of all transactions. (A government video is available here).

Blockchain’s characteristics make it an attractive solution to help address some of the challenges faced by public service agencies.

  • Increased efficiencies: blockchain enables both process and organisation efficiency. Processing transactions (whether financial or information-based) are less prone to error and simpler. For the public sector, blockchain presents a specific opportunity to provide traditionally paper-based services digitally; where the service is already digitised, blockchain can simplify it by breaking down silos – such as Estonia has done by securing health records on blockchain. This is particularly true where blockchain services can support automated and AI solutions, as it provides a single source of data.
  • Data integrity: blockchain’s immutability prevents it being altered or removed. This provides a transparent structure and a clear audit trail of transaction, which prevents tampering and enables a more private network.
  • Reduced risk: blockchain’s encryption provides an opportunity to help reduce fraud, increase compliance and address corruption. For example, in the allocation of social security benefits, management of some tax processes and management of land registries.

As a result, government is talking about and testing blockchain. However, these are not yet applied at a large scale. Lagging legislative and regulatory structures – needed to ensure appropriate standards and guidance for implementations – have halted further applications of blockchain. Whilst there is a growing interest in this technology, the expertise lies largely with a small community of technologists; government must improve its knowledge to make the most of blockchain.

These limitations reflect the embryonic nature of blockchain technology, which will change as it develops. They are a reminder, however, that there is an opportunity to collaborate across government and industry to establish policies and structures to support blockchain. As public-sector organisations continue to face funding cuts and increased demand for services, there is an opportunity to innovate and find new ways of addressing these challenges – particularly with transformational technology such as blockchain.

Making government fit for the digital age means employing today’s technology while identifying tomorrow’s. The UK Government has identified the potential of blockchain in selected areas. Applying knowledge held by a few to services used by all should be next on the agenda.