UETP - Facilitating the 'Economic Internet' with eIDs eID the - - PowerPoint PPT Presentation

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UETP - Facilitating the 'Economic Internet' with eIDs eID – the business case for the banking and finance community EEMA, London, June 5th, 2015

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The Economic Internet

The Economic Internet enables everyone and everything to: connect with each other understand each other and transact with each other

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The Economic Internet of Everything: Three requirements Internet of Everything Ability to express and interpret (uniform) economic transactions

To connect people, organisations, things, machines, money, assets, data, rules, information, messages and transactions (so basically everything) with each other in (near) real time. To express and interpret in a uniform way, who, what, how much, where, when, and how in economic transactions

Ability to execute (uniform) economic transactions

CONNECT

To instruct and execute in a uniform way, identification, authentication, delivery, reporting, taxation, subsidies, authorisation, conditions, payments, reviews, ratings, insurance and participation and more in economic transactions

UNDERSTAND TRANSACT

THE ECONOMIC INTERNET OF EVERYTHING

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CONNECTING EVERYONE AND EVERYTHING People Communities Things, machines Organisations Messages Transactions Data, rules and information Money, assets

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• 1. CONNECTING EVERYTHING: THREE STEPS

1) Generate a unique ID 2) Provide that unique ID with meaning (and / or references), so that it relates to a person, thing, message, piece of information, etc. 3) Place that unique ID with meaning in a directory service so it can be found and understood or connected with

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Internet of Everything is Internet of Identities

UETP ID / certificate generator UETP IDs are generated without meaning. Society links these IDs with existing IDs or new meaning, providing significance in a virtualised society or economy and linking things together. Who I am examples Electronic IDs of persons (eIDAS) GLEIF IDs for

• rganisations

What I have examples Asset registries, such as IBAN bank accounts SEDOL IDs for securities Digital money What I want examples Requests for quotes, information and

• rders

What I can examples Abilities offered to the market (product offers) What we do examples UETP messages and instructions UETP transaction IDs

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Examples of UETP IDs / certificates

ID type Practical example Personal ID A personal electronic identity of Thomas Bauer, issued by a German bank, under the policies of a competent German policy authority governed by the laws and principles of the European Union Organisation ID An organisation electronic ID along the lines of the Global Legal Entity Identifier Framework Asset ID An electronic asset ID representing a vehicle with its unique manufacturing and local registration number and legitimate owner Machine ID An electronic ID of the traffic light around the corner Money ID An electronic wallet ID representing digital money Message ID A message ID referencing to a delivery confirmation in a transaction Information ID An ID with product description details and translations Rule set (legal) In the legal jurisdiction of the Netherlands, no alcohol can be sold in transactions to people younger than 18 years Rule set (fiscal) In the fiscal jurisdiction of Mongolia, the transaction tax for sales / purchase transactions of milk is 15% and can be paid automatically. Transaction ID Representing a container and reference ID for all IDs that together make up for a specific transaction

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Certificate Authority (ID generator) and Directory Services

• ID certificates ensure integrity and trust in a transaction.
• A highly secure, federated network of certificate authorities issue

IDs (in the form of certificates). Anybody who adheres to minimum UETP standards can be part of a federated UETP network.

• These IDs are initially agnostic (= without meaning) and then are

used to label anything, from messages, to transactions, subjects, people, organisations, objects, things, money, wallets, etc.

• Highly secure authentication, encryption and signing (Levels of

Security 3-4 and Levels of Assurance 1-4 possible. Levels 4 are highest possible according to ISO 29003/29115 standards)

• Directory services - like a big telephone book - make it possible

that everyone and everything can find and connect with each other.

• Existing legacy IDs (like national eID systems, property registers,

bank account numbers, telephone numbers) can be made interoperable by referencing.

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From 'separate service communication' to one 'group chat'

Traditional transactions UETP transactions

Several separated two, three and four party communication models The n-party “group chat”

Buyer Seller Buyer's Bank Seller's Bank Logistics Solution Provider Buyer's Fiscal Authorities Seller's Fiscal Authorities Buyer's ERP and accountant Seller's ERP and accountant Machines and IoT Other... Buyer Seller Buyer Seller Buyer Seller Buyer's Bank Seller's Bank Logistics Solution Provider Buyer's Fiscal Authorities Seller's Fiscal Authorities

Payment Delivery Taxation Etc., etc.

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• 2. UNDERSTANDING EVERYONE AND EVERYTHING

“SPEAKING THE SAME (ECONOMIC) LANGUAGE”

UETP enables the global exchange of manageable and interpretable information “In the digital age, your environment takes you as far as the acceptance of your language and data formats” “We can either choose to create our own languages and formats and ask others to comply or we can make a joint effort to create and accept a common language with common data formats” “UETP brings the smart transaction receipt that pays for itself, automates delivery, accounting and taxation and lots more. The transaction is smart, because its expression is interpretable (understandable)”.

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Saying the same things in a billion different ways

Domain Type of information Example Who Buyer and seller information Identities and preferences W ha t Product / service information HS (product) codes How much (Counter)value information Amount and currency When Date, time and timezone Date / time stamp Where Place(s) and jurisdiction(s) Geo-, country codes How Contractual information Sales, labour, investment Other Other information Manuals, promotions, ...

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The need for uniform understanding – Two colliding worlds

Economic growth becomes more communication intensive. Meanwhile, data formats for comunication grows too. This will lead to exponential growth of costs. Growing number of rules, guidelines, policies and data formats over time 2000 2007 2015 Relationships in global growth, with increasing number of messages (communication) in transactions economy trade transaction instructions vs.

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UETP is an ecosystem language – HTTP vs UETP

With UETP, one request instruction can be interpreted and executed to all parties simultaneously that accept to work with UETP. Together they can process transactions in real time. HTTP is written for specific applications on specific servers, not for an ecosystem. The search query for 'UETP' with Google and Yahoo yielded the following in my browser:

https://search.yahoo.com/search;_ylt=A0SO803tJU1UqzIAh4RXNyoA;_ylc=X1MDMjc 2NjY3OQRfcgMyBGZyA3lmcC10LTMyNS1zBGdwcmlkAwRuX3JzbHQDMARuX3N1Z 2cDMARvcmlnaW4Dc2VhcmNoLnlhaG9vLmNvbQRwb3MDMARwcXN0cgMEcHFzdH JsAwRxc3RybAM0BHF1ZXJ5A3VldHAEdF9zdG1wAzE0MTQzNDIxNjE-? p=uetp&fr2=sb-top-search&fr=yfp-t-325-s&fp=1 https://www.google.com/search?q=uetp&ie=utf-8&oe=utf-8&rls=org.mozilla:en- US:official&client=firefox-a&channel=sb&gfe_rd=cr&ei=HCFNVMm7G- eK8QefmYH4CA&gws_rd=cr&fg=1#rls=org.mozilla:en- US:official&channel=sb&q=uetp

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It's all about agreement on semantics and formats ...

The global ability to communicate with the most important verbs and interrogatives: to be, to have, to do, to want, to can and who, what, when, where, why, how, etc.

Who I am What I have

Identity User profile Things, money, assets, accounts

What I want How to do it What I can

Preferences Transaction Data Abilities / availabilities Request for information Who, What Product offers Request for quote When Catalogues Order request Where Price information Execution management How Preferences Other information Other information Other information

= UETP transaction instruction

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UETP as a Smart or Self-Executing Transaction Receipt

Organisation name and logo (organisation details, etc.) Date and time Place(s) and jurisdiction(s) Contract type: Simple sales / purchase Privacy and disclosure: Anonymous to seller ===================================== Product(s) 1 $ 10.00 Discount -/- 10% $ 1.00 Returned goods $ - =======

• Subtotal without taxes

$ 7.20

• Tax type(s) and percentage(s) (20%)

$ 1.80 ======= TOTAL $ 9.00

• Buyer-name / anonymous, etc.

Payment status and amount PAID $ 9.00 Delivery status DELIVERED AT CHECK OUT Updated into my accounting system YES

• Loyalty program points change

+ 72 ===================================== Approval / reporting regulatory authority 1 YES Approval / reporting regulatory authority 2 YES Audit level of assurance Level 3

Identif i cation and authentication: The receipt knows who the seller is, with relevant transaction information such as a bank account and address information. The seller is authenticated. Also the buyer and other stakeholders in the transaction can be identif i ed and authenticated. Ownership, Use and Wallet Management: Loyalty points can be added to or deducted from the loyalty program(s) that the seller provides and the buyer prefers Authorisation, monitoring and control, data and privacy management: With basic instructions and information about the transaction, the transaction can connect to the right parties, such as legal authorities, etc. Ownership, use and wallet management, information, accounting and reporting: The receipt can transfer ownership from seller to buyer and manage user rights of goods, services, objects or money. Taxation and subsidisation: Taxes and subsidies can be paid automatically with information about the right (f i scal) jurisdiction, transaction contract type, product type, amounts and relevant buyer and seller information Conditions and escrow management / payment, clearing and settlement / information and reporting, delivery, billing and shipping : All kinds of transaction details can be shared with each other automatically, bringing new interactions and clarity of status to all. Security and Audit: The electronic and transaction environment is audited for security and authentication. An audit level of assurance is provided.

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UETP – Generating uniform interpretable transaction data

Domain How UETP transaction data is created Who Wh a t How much When Where How Other * geo stamping technologies, embedded in the UFCA can determine and verify location UETP identity IDs: Stakeholder identities, preferences and information (can be references to existing identities, information and systems) UETP goods / services IDs: Product / service descriptions and information (for instance referenced HS codes, United Nations, ICC, GS1, ISO, EC, etc.) UETP currency and measurements IDs (possibly referencing to ISO, etc.) and numeric notations to express quantities UETP date – time stamp, issued and verified for any required message, transactions, etc., by UETP federated certificate authority (UFCA) UETP geo stamp (incl. administrative jurisdiction and / or GPS coordinates), issued and verified for any required message, transaction, etc. (by UFCA) * UETP legal, supervision and fiscal information IDs containing contractual description information (with possible references to existing standards) Other free format information to be structured further towards the future in the UETP community such as warranty, manuals, etc.

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• 3. TRANSACTING WITH EVERYONE AND EVERYTHING

Identification and authentication Data and privacy management Billing, delivery and shipping Security and audit Ownership, use and wallet management Authorisation, monitoring and control Information, reporting, accounting, ERP Taxation and subsidisation Conditions and escrow management Payment clearing and settlement

Placeholder Rating and Review Placeholder Participation, Risk and Insurance

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How transactions have been processed traditionally

Transaction services almost all use similar information, though they do use different data formats and procedures

Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Who? What? How much? When? Where? How? Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract

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Transactions according to UETP

Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Other information

• 2. Identification,

authentication and biometrics

• 4. Data

Management and Privacy

• 3. Security and

Audit

• 8. Authorisation,

Monitoring and Control

• 5. Ownership, Use

and Wallet Management

• A uniform way to define and describe transactions and instructions
• A uniform way to process economic transactions
• Norms for a safe, secure and well-functioning infrastructure
• An open, federated, decentralised and organically transformative

governance structure

• 9. Conditions and

Escrow Management

• 10. Payment

Clearing and Settlement

• 11. ERP, Ledger

and Information

• 1. Request for

transaction

• 12. Response to

request

• 7. Taxation
• 6. Delivery, Billing

and Shipping

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Major improvements in risk and compliancy

• Parties and applications work with same information
• No more translation differences
• Improvements in client privacy and data management
• Higher Straight Through Processing inside and outside the
• rganisation
• Real time consent of all parties involved in transaction
• Minimising risks of partially processed transactions
• Supervisors and regulators have same information at same time,

reducing compliancy risks

• Banks / telcos / trust service providers can provide levels of trust

and assurance in security and authentication

• Potentially more and better structured data (attributes) available

for authentication and security.

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Why UETP? – Different reasons, depending on users

UETP, like any language, has different benefits for different users in different situations. “It enables me do to everything in real time.” “Finally, ownership and control over the data that I generate.” “Insourcing and outsourcing has become so much easier.” “Creating partnerships in real time.” “No more tax filing. Taxes can be paid automatically.” “Substantial savings in working capital.” “Things have become so much more efficient.” “I increasingly buy things from companies I did not even know existed.” “Real time compliancy assurance, provides so much comfort.”

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eID for banks and financial communities – and then?

UETP enables eIDs to enter into endless possibilities in transactions. eID facilitators can add a range of new value added services to clients Add eIDs into existing infra (like smartcards, demo this afternoon)

Current electronic identity capabilities

Client (can be identified by bank)

Future electronic identity capabilities

Client (can be identified by everyone, facilitated by bank, telco, etc.) Bank Bank

• Payments
• Payments
• Authentication services
• Real time valid contracts
• Automated finance
• Automated tax payments
• Automated accounting
• Etc.

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UNIFORM ECONOMIC TRANSACTION PROTOCOL

UETP and eIDs under eIDAS

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European e-identities under eIDAS, facilitated by UETP

Federation of certificate authorities, certified according to approved policies, governed by EC. Policy authorities responsible for policy execution

Challenge to audience: Use e-identities beyond scope of private persons and / or organisations. Identification of e-objects, assets, wallets and things according to same infrastructure

EC eIDAS Governance (UETP) transactions. These can be transactions that relate to e-identity creation and revocation and any societal transactions that make use of e-identities. Governance layer Transaction layer Policy layer Certificate / eID layer Also advises governance layer UETP provides format, functionality and traction with user base. 'Everything is certified' Banks and telcos can have limited liability as issuance / management of eIDs is done by specialised certificate authorities

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eID lifecycle management

Beginning of life UETP transaction End of life Registration Service Certificate Generation Service Policy (Web) Service Dissemination Service Revocation Management Service Certificate Revocation Status Service Online Certificate Status Service I want an identity OK, I know who you are, I will secure it Is it you? Here is your identity I want to revoke my certificate Is this certificate revoked? What is the policy? Is or was this certificate valid?

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Federated, distributed ledger ('common database')

• Common platform or 'common database' does not mean common

technology, ledgers can be linked.

• Common protocol to create, revoke, recognise, track and trace digital

identities to do transactions is essential for e-identities to interoperate.

• Ledgers and storage can be different, as long as identities and transactions

can find each other. Directory services are relevant.

• Distributed ledgers for identity issuance should be open and free, verifiable

and preferable not held / operated for profit (basic utility function). Preferably to share infrastructure with other e-identity issuers and / or jurisdictions, potentially outside EU. Likely to receive competition from private and public initiatives.

• Managed, semi-private blockchain most likely medium term winner, not

pinpointed down on one technology. Public function with private security.

• Ability and willingness within UETP community to make a prototype or pilot

'common database' for (European) e-identities.

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HOW

• FOCAFET as facilitators to open development
• How UETP is being developed
• Examples
• When and where
• Putting UETP into context
• FOCAFET as facilitators to open development
• How UETP is being developed
• Examples
• When and where
• Putting UETP into context

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FOCAFET – Foundation supporting the UETP initiative

FOCAFET For Open Convenient And Fair Economic Transactions

• Adheres to “This is for everyone” - principle (internet way)
• UETP protocol is free to use
• Non-profit foundation, no direct benefits to management
• Facilitates open, federated, decentralised governance models
• Is transparent and organically transformative
• Facilitates open source, royalty free, patent free co-creation
• By design, no third party trust required
• By design, no role in transaction execution
• Intends to minimise itself, avoiding power creation

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UETP – based on a dynamic knowledge model

• Knowledge of transactions is captured in an open dialogue and open

knowledge model. For instance, we can discover requirements for concepts of a 'buyer' and a 'seller' and functionalities of 'payment' and 'delivery' in a transaction, then these are added to the model.

• Knowledge modeling happens by highly specialised, trained and

dedicated UETP knowledge modelers

• The knowledge model grows automatically, when more knowledge

(concepts and functionalities) are added.

• Concepts and functionalities appear once (no duplication) in the

knowledge model and are defined in the UETP list of terms

• Concepts and functionalities are dynamically linked to establish
• relationships. The knowledge model is kept simple by design
• The knowledge model is translated to a data model and to

transaction message types. Supporting all knowledge (concepts and functionalities) that has been generated by the community.

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UETP – Semantics and knowledge model combined

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Standardisation traditional style versus UETP style

With UETP, we set a time line for a goal, get input from various good practices and vote. Semantically, there is no duplication and from a broad functional base, we can support most existing standards

Traditional standardisation

• Closed discussion
• Not-continuous
• Formal communications
• Imposed, standard to value
• Static, from the top down
• Political, formal
• Slow turn around
• Fragmented bits and pieces
• Weaker network effects
• Little enforcement means

'UETP standardisation'

• Open discussion
• Continuous
• Real time dynamics
• Voluntary, value to standard
• Organic growth from bottom up
• Consensus, co-creative
• Fast turn around
• Global
• Stronger network effects
• Transaction certification

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How the UETP knowledge model is built

Mobilise and build co-creation platform Deliver pilots to build knowledge and functionalities Create common language and embed in daily use

Global, multi-party co- creation platform representing interests of key stakeholder groups in global transactions (also non- economic). The value, usage and workings of UETP are demonstrated by connecting to existing international transaction initiatives and leveraging both existing and emerging standards from partners. Setting up and maintaining an ecosystem which establishes uniform and accepted data definitions, standards and protocols, which can be used by al.

COMMON LANGUAGE

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Pilot: certainty for both buyer and seller

A common, traditional problem on the internet is that the buyer wants to have certainty of delivery and the seller certainty of payment. Either the buyer or seller has to pay or deliver upfront. Traditionally, the payment and delivery processes are managed as two separate transactions. We created a pilot where money for the transaction was reserved. When the buyer enters a pin code with the deliverer of the product, the buyer receives the product and payment is committed to the seller. A screenshot from the live pilot production environment

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Pilot: 'UETP group chat' - merchant supply chain finance

Bringing the relevant parties together in one group chat, having them to share and work

• n the same

transaction information, allowed for new and easier forms

• f promise to pay

and receivables finance. Working capital costs and treasury costs reduced substantially as a result.

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Pilot: Privacy in the internet of everything

Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Other information Identification and authentication Data and privacy management Security and audit Request for transaction Response to request

Step 1 Step 2 Routing of information Bank and card information Delivery information Fiscal information

The seller no longer obtains buyer's bank or credit card details or the delivery address. Information can be provided to those who have a need to know.

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Pilot: No more tax filing

Buyer / Seller Good / Service Amount / Currency Date / Time Place(s) Legal contract Other information Request for transaction Response to request

Fiscal information

85 – 90% of global taxes are transaction taxes. They can be taxed automatically with information that holds jurisdictions, amounts, product descriptions, contract types, etc.

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Roadmap - When

Evolving pilots on basis of UETP

• First (commercial)

applications are live (Q1)

• UETP as a Service becomes

a reality

• First UETP protocols in

place (version 0.1 in Q1)

• UETP protocols in place

with enhanced functionalities

• Supporting most global

transaction functionalities in 2016H1 2014 2015 2016

✓

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Foundation with regional hubs

North East Asia South Korea / 2015Q3 ME & Africa UAE / 2015Q3 South East Asia / PAC Singapore / 2015Q3 Europe The Netherlands / live Americas Panama & Colombia / 2015Q3

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Globally fast expanding ecosystem support

• Globally leading technology and data enterprises
• Payment and financial industry players
• Central Banks, monetary authorities and bankers' association groups
• Logistics sector
• Globally leading consultancy firms (also providing moderation support)
• Health and insurance companies
• Telcos and hardware enterprises
• (Other) Industries and sectors
• Marine, defense, police, anti-fraud and security players
• Consumer interest groups, newconomy thinkers, open-source, bitcoin
• Retail
• Governments, regulators and supervisors in all continents

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UNIFORM ECONOMIC TRANSACTION PROTOCOL

LET'S MAKE THIS WORK TOGETHER

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UNIFORM ECONOMIC TRANSACTION PROTOCOL

APPENDIX: More food for tought

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Sometimes not immediately understood

• UETP is not owned by someone or something
• UETP is not a platform, but a voluntarily connected ecosystem willing to

speak and adhere to self-created and self-imposed UETP rules and standards

• There is not one central processing hub. The ecosystem together takes care
• f the processing of UETP transactions, without required trust of third
• parties. This also greatly improves security (no single points of failure).
• Everyone can set up a UETP certificate authority to generate unique UETP

IDs (as long as the certificate authority adheres to the rules and standards, which is automatically checked).

• UETP does not prescribe how transactions should be done. UETP provides

technology that society can use for implementing transactions in the way it wants to.

• You don't need to change your systems to join the UETP ecosystem. Just

translate your systems' output into UETP or UETP into input that your systems understand.

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Why UETP will be successful

• Easily and intuitively understood
• UETP protocol is free to use
• Traction: Already critical committed ecosystem for substantial

network effects

• Right timing, need for standardisation is high
• Full time and sufficient resource availability
• Scope and scalability
• Open to integration of existing standards and practices
• Open, decentralised, federated and organically transformative

governance

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Becoming aware of economic evolution

Main economic theme Time in years Relevant space Interdependency Hunting and gathering 40,000 Family / tribal Very few actors and things Farming 4,000 Village / City Few actors and things Industry 400 Nation state Many actors and things Information 40 Global Global actors and things

During our course of economic evolution, the main theme seems to be mutual dependency, resulting in increased labour specialisation. We progress economically when we become more 'united in diversity'. The Economic Internet of Everything can help us progress in our path of economic evolution.

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Maximum (economic) output hypothesis “Maximum (economic) output is achieved, when everyone and everything is optimally (economically) involved with its most unique talents and characteristics” “Maximum (economic) output is achieved, when full self purpose and full collective purpose are

• aligned. It is here where self purpose and

collective purpose coincide” “What is keeping us from reaching this state, is fully aligned connectivity”