Robert Kugel's Analyst Perspectives

IBM Blockchain Earns Our Innovation Award

Posted by Robert Kugel on Aug 8, 2019 7:00:00 AM

Ventana Research has awarded IBM its 2019 Digital Innovation Award. This award recognizes the vendor’s support for identity management using blockchain technology through IBM Verify Credentials. The application is a first, small step in establishing a blockchain-enabled system for decentralized identity management, a technology that ultimately will enable point-to-point exchange of information about people, organizations or things. This form of identity management has considerable potential in the following areas:

  • enhancing personal privacy
  • facilitating the exchange of information related to an individual’s credentials and skills
  • improving compliance with licensing and credentialing requirements
  • reducing the cost of acquiring and working with information about an individual.

In our view, blockchain technology is particularlyVentanaResearch_12th_DigitalInnovationAwards-Winner well suited to ensuring personal privacy while providing reliable authentication of an individual’s credentials. The technology can improve the level of certainty — and therefore trust — in identity management and authentication processes. Because of their inherent security (through public key encryption and multi-independent node structure), the use of blockchain distributed ledgers can enhance trust, provide greater control over access to personal data and make it simpler to access and manage certifications and accreditations.

Of course, blockchains are not infallible, and they are not a complete solution for many of the identity management and authentication issues that businesses and individuals face in the non-digital world. My in-depth discussion of blockchain for identity management can be found here.

The need for individuals to control their identity and for there to be a reliable method for verifying one’s credentials has intensified in the digital age. Identity theft and privacy incursions have increased individuals’ sensitivity to protecting use of their identity and ensuring their privacy. The self-sovereign, decentralized identity management that blockchain technology facilitates means that individuals can control when, where and with whom they share their personal information and credentials. In the past, this information was stored in scattered, paper-based repositories. This made it easier to control access to personal data, but it also meant that verifying this information was slow, inefficient and expensive. Information on the internet is far easier to use and abuse, heightening the need to handle information about identity and credentials in a secure and efficient manner.

Built on open standards created by the Decentralized Identity Foundation (DIF), World Wide Web Consortium (W3C) and other standards groups, IBM Verify Credentials enables trusted issuing organizations such as schools, licensing entities and governments to issue credentials to individuals. For their part, individuals can hold and present credentials to verifying organizations of their choosing. In an increasingly digital world, it’s possible to address the need to authenticate information digitally. For example, a system can instantly verify that an individual has been certified by a recognized body to operate a specific type of machinery or system. For individuals, corporations, and government or regulatory entities, the easy availability of certification can reduce frictions, cut costs and enhance compliance. Skills and experience also can be certified. In an increasingly services-oriented economy, digitally matching jobs with skills and certifications can accelerate staffing and hiring, make it easier to find the right people while also reducing employment costs.

IBM is offering a free alpha version of IBM Verify Credentials, a simplified version of the product intended to demonstrate how a decentralized blockchain-enabled approach to identity management operates. I recommend that organizations download and deploy it to investigate the potential of blockchain technology to provide a secure and efficient way to manage identity in the modern era.

Regards,
Robert Kugel
SVP & Research Director

Topics: Human Capital Management, Collaboration, Workforce Management, Work and Resource Management, blockchain

Robert Kugel

Written by Robert Kugel

Rob heads up the CFO and business research focusing on the intersection of information technology with the finance organization and business. The financial performance management (FPM) research agenda includes the application of IT to financial process optimization and collaborative systems; control systems and analytics; and advanced budgeting and planning. Prior to joining Ventana Research he was an equity research analyst at several firms including First Albany Corporation, Morgan Stanley, and Drexel Burnham, and a consultant with McKinsey and Company. Rob was an Institutional Investor All-American Team member and on the Wall Street Journal All-Star list. Rob has experience in aerospace and defense, banking, manufacturing and retail and consumer services. Rob earned his BA in Economics/Finance at Hampshire College, an MBA in Finance/Accounting at Columbia University, and is a CFA charter holder.