Connect with us


Taking a Pragmatic Approach to Smart Contracts



Taking a Pragmatic Approach to Smart Contracts

By Akber Datoo, Managing Partner at D2 Legal Technology

Momentum appears to be building for the adoption of smart contracts. Smart contracts offer compelling benefits – from streamlining to automation of the contracting process – and they have the potential to, amongst other capabilities, improve efficiency, reduce client costs and legal risk. But just how should the legal industry respond? 

Like with any new technology, a pragmatic approach must be adopted and current limitations must be taken into account. As Matthew Williams, Consultant and Akber Datoo, Managing Partner at D2 Legal Technology insist, any lawyers looking to adopt smart contracts need to understand where they can be applied and where they would deliver most value to clients. This means rapidly adapting the skills mix – from recruiting computer and data scientists with legal understanding to upskilling lawyers with foundational technology and data skills, ensuring they are equipped with the knowledge and confidence to help clients unlock business value through legal change and in this case, smart contracts.

Look beyond the hype

According to research organisation Gartner, by 2022, smart contracts will be in use by more than 25% of global organisations. Yet while this might sound like a ringing endorsement for this nascent legal technology, look beyond the headline and such assertions are carefully tempered with multiple caveats. Notably, this level of adoption applies only to ratified unbundled smart contracts – namely those that are both closely defined and with narrow impact. This does not apply to the real contracting world, with complex nested contracts that can be affected by multiple outcomes, which start to reach the limits of what is possible to test as a smart contract using formal methods.

Essentially, right now, commentators believe that just a highly simplified interpretation of the smart contract concept may gain adoption; representing a tiny fraction of overall commercial contracts negotiated. The 25% figure quoted by Gartner is open to interpretation and could be considered somewhat misleading: smart contract adoption en-masse will take much longer and require significant advances in technology, both security and volume processes, but more fundamentally understanding and culture to bring them into the mainstream.

There is no doubt that the concept of smart contracts has significant appeal. For commentators such as Richard Susskind who believe that automation could spell the end of lawyers, smart contracts very much fit that message. However, while clients may be getting excited about the opportunities to reduce complexity – and cost – and reduce the need for trusted third parties, are they willing to rely on two complementary, albeit distinct technologies in blockchain and smart contracts, that are still yet to be fully realised and their legal validity tested, let alone confirmed?

Practical considerations 

Right now, the hype is far ahead of the practical adoption of smart contracts, for several reasons. For a start, there is no agreed definition of the term – with academics and experts still lacking consensus, over twenty years since the concept was first conceived by Nick Szabo as a ‘set of promises, specified in digital form, including protocols within which the parties perform on these promises.’

The technology to enable smart contracts has, of course, evolved significantly over the past two decades, with the arrival of Distributed Ledger Technologies (DLT) such as Blockchain making the smart contract concept more commercially feasible. And while an agreed definition is still elusive, Dr Christopher Clack from the Centre of Blockchain Technologies at UCL has at least outlined the key characteristics of a smart contract: a smartcontract is an ‘automatable and enforceable agreement, automatable by computer, although some parts may require human input and control. It is enforceable either by legal enforcement of rights and obligations or via tamper-proof execution of computer code’.

It is this combination of automated process and human input, however, that underpins the ongoing challenges regarding the adoption and enforcement of smart contracts. A whitepaper jointly published by the trade association ISDA and magic circle law firm Linklaters explored the continuum that exists in the form of a smart contract which is entirely in code and a smart contract combining natural language and code. It is still uncertain as to where on this spectrum successful smart contracts will lie. The answer will in part depend on whether there will be this development of lawyers with the confidence in the technology and the ability to undertake, or at least be involved in the review of the code, possibly in some more amenable form, representing the smart contract. Additionally, they would need to be able to understand where to optimally blend code with the natural language required for non-operational contracts.

Furthermore, there are concerns regarding DLT; from the inherent reliance upon cryptocurrencies, with their dark web connotations and global concerns regarding their future stability, to the open and public nature of DLT networks. The financial market is looking to address this with the creation of closed, market-specific DLTs – and it is possible the legal profession will follow suit. Indeed, some law firms may decide the only secure option is to develop their own bespoke DLTs, but DLTs are impractically slow right now. By way of example, the Bitcoin Blockchain can only process five to seven transactions per second and the Ethereum Blockchain can process around just over twenty. Public Blockchain networks are also incredibly expensive to run, requiring a significant amount of computational power. Iceland’s energy consumption is expected to double due to the effect of blockchain mining, which may limit its practical commercial usage. The processes, skills and business practices relating to the wholesale adoption of smart contracts are still very much under development.

Immature model

Clearly the automation and self-execution enabled by smart contracts is hugely compelling, offering the legal profession a chance to streamline processes and reduce overheads. A proportion of contracts could be automated, at least in part. Event-driven contracts, such as AXA’s Fizzy flight insurance smart contract has, to date, been a good example of a smart contract that could be executed via a DLT without difficulty. But the vast majority of contracts will require a combination of coded smart contract and natural language to support non-operational clauses. Firms need to develop strategies for storing these contracts – from determining how they are split across a DLT and the existing Document Management solution to ensuring ease of retrieval and review.

Furthermore, while a contract may be drawn up in one country, the smart contract code could be stored anywhere on the DLT globally; should a contract be questioned, under which governing law would a case be tried? The potential for a contract to face years of legal wrangling simply to agree jurisdiction cannot be overlooked – with many firms considering the creation of a pre-contract smart contract to a defined jurisdiction. With these considerations in mind, the judiciary is starting to take note of the legal implications of smart contracts with Sir Geoffrey Vos, Chancellor of the High Court, recently calling for a test case to provide some clarity as to legal status of smart contracts.

This is most definitely still a work in progress. Developments are exciting, as smart contract companies such as are looking to feed real-time Internet of Things (IoT) data into a smart contract and use real-time data – such as from a delivery van to support supply chain processes, to the creation of standardised pieces of code to provide further automation – and minimise lawyers’ coding requirements. However, before any such innovation can be embraced, the fundamentals must be in place: lawyers will still require a basic understanding of systems, data and IT development before being let loose in the use of any standardised code if they are to avoid unintentionally including bugs or errors within the contract. (A secondary question of course being the professional expectations of a lawyer in respect of such activities, and where any liability might lie in cases where it goes wrong!).  The concept of plug and play smart contracts is currently unrealistic.

Practical Next Steps 

Smart contracts clearly have the potential to be a key technology for the future once it has matured and legal considerations are resolved. Until then, the legal profession must take practical next steps to fully unlock the business value of smart contracts. As well as addressing the educational and skill set gap, there needs to be greater appreciation of business processes related to legal agreement data and basic data governance principles put in place and implemented in relation to them. Smart contracts are data-driven to achieve a business outcome, and therefore smart contracts will fail to unlock any real business value, rather “rubbish in, rubbish out”.

With these practical steps in mind, it is essential to step back and understand the true implications of this technology. It is tantalising and logically compelling and without doubt will have a significant role to play in the years ahead. But there is a long way to go before businesses can confidently and wholeheartedly embrace smart contracts for anything other than the simplest of agreements. To gain real traction, DLTs need to mature, smartcontracts need to be legally tested, and they need to be enforceable. The future is now, the future is legal and DLT.


Simplifying the Sector: How low code can aid digital transformation in financial services



Simplifying the Sector: How low code can aid digital transformation in financial services 1

By Nick Ford Chief Technology Evangelist, Mendix

From online banking to contactless payments and Apple Pay, it has been well demonstrated that the financial services industry is significantly ahead of many others when it comes to technology.

Traders, as well as customers, are now armed with the latest advances in technology and able to operate at super speed with more information at their fingertips than ever before.

However, the sector has not been immune from challenges created by COVID-19. The most significant challenge is maintaining the level of innovation they have been historically known for, with constrained budgets and smaller teams.

The pressure is on

The financial services sector is certainly quite complicated. There are many different regulatory bodies that monitor corporate conduct, which can make innovation a slow and arduous task. It also means that every time a new law is implemented, the sector needs to adjust to it, and that can mean anything from revising security protocols to radically changing the way information is processed, transmitted or audited.

This makes the job difficult for IT managers in the sector. Many of the systems they’re dealing with are old fashioned, dating back many decades and therefore not up to standard when it comes to performance and security. With lockdown restrictions meaning most sector staff are working remotely, this adds an extra pressure to IT teams that now have to ensure systems, data and work devices are functioning and always accessible. Digital transformation can help with this and a recent Mendix study found that 76% of IT managers in the sector believe it can improve operational efficiency.

Tech as a necessity

The sector now must be alert due to a new emerging challenge – the tech savvy customer. The modern age means customers are demanding much more from the services they are offered, with two things being highly desired; speed and transparency. As a result, many banks, hedge funds, and investment firms are investing in the appropriate technology to help meet these demands. The data that comes with upgrading ultimately allows financial institutions to better understand their customers and tailor their services more accurately to the changing trends influencing customer behaviour, Being able to have such knowledge is becoming more vital, as the pandemic continues to significantly affect the behaviour patterns of consumers and the preferences driving them.

Investing in technology can also increase efficiency within the sector at a time where teams and budgets are stretched, which can obviously have massive benefits. Digital transformation also leads to faster, better performing systems provides teams with the right tools they need to effectively get their job done. Tech is no longer a fintech privilege – it’s a currency. So much so that nine out of 10 IT leaders in financial services believe their firm will need to invest in digital projects over the next two years, just to survive in a rapidly changing market.

Powering digital transformation with low-code

To manage these different priorities, IT teams need to look beyond themselves and collaborate with different departments to create revenue-generating services that truly answer the clients’ needs – and it needs to empower all developers with the right tools to do so. This improved collaboration between IT and customer-facing staff means that services are designed to suit the needs of the customer-base, whilst reducing the pressure of an already-stretched IT team.

Low-code is one way to foster this collaboration. It requires little coding knowledge or expertise, meaning software development or the creation of business applications can include staff with non-technical backgrounds. Instead of having a back and forth between tech teams and other departments – of which miscommunication is always a risk – the development of apps can be  inclusive involving a variety of teams, bringing together those that understand the business problems with those that understand the IT landscape, core systems and services to contribute to the vision of a product. IT stays in control with governance and guardrails built in to ensure compliance to the various standards required.

Digital transformation is an ongoing process in every industry. With low-code programming some of the current complexities and challenges facing the financial services sector can be tackled, allowing it to fully step into the digital age and continue being a hub of technological innovation.

Continue Reading


Leading from the front – why decision makers must embrace automation



Leading from the front - why decision makers must embrace automation 2

By Jeppe Rindom, Co-founder & CEO, Pleo

Ask any decision maker at a business about admin and you’re likely to be met with a familiar response – it’s a necessary evil that swallows time, but also helps inform strategic choices. Informed decisions are always better than uninformed ones, but many businesses still rely on outdated legacy processes to gather the data they need to make critical choices… and we’ve all seen the perils of a poorly maintained Excel spreadsheet in the news recently.

At director level, these administrative tasks can consist of signing off expenses or monitoring company spending to inform upcoming budgets. Although crucial to running a business well, these can be time-consuming and frustrating when you don’t have the right tools to make sense of it all. The solution? A simple change of approach.

A logical solution

This is where automation comes in. Over the last decade, we’ve seen how technologies including chat-bots and artificial intelligence have impacted everyday business, from customer-services and marketing to data analytics and time-management. More than ever, this is allowing employees to free  up time to work more efficiently and focus on business-critical tasks. But this isn’t a quick fix. At a decision making is required. Ironically, a lot of these tasks relate to how a business can improve efficiency and productivity.

Add in the fact that many of these senior staff members have tight schedules, and can’t afford to spend several hours trawling through spreadsheets, and it’s little wonder high level admin is still an issue. In a recent customer survey, we found that 75% of senior managers spend over an hour a week on expense reports, with 14% losing nearly a whole working day (five hours or more) a week to managing them – time that could be better spent growing their business. The same study found that our platform saves people an average of 11.5 hours a month on managing company expenses. If you consider this could mean an extra day for a CFO or Finance Director to spend on more essential tasks, such as business forecasting or growth planning, the reward for investing in well designed automation at this level is clear.

Building trust

Jeppe Rindom

Jeppe Rindom

But, automation isn’t just a case of saving time; it also fosters trust. Our study found that over half (51%) of users agreed that automating the laborious parts of their expenses like receipt capture, categorisation and expense reports also helped them build trust within their organisation. Automation helped them to excel at the things they’re most interested in, and were actually hired to do. I’m a huge advocate of empowering people with the tools they need to succeed. And through the empowerment automation brings, it’s only natural that employees begin to feel their worth in the business and that they are trusted.

A business-wide approach

Yet for automation to work, a company-wide understanding of its potential is vital. Adoption by senior staff should not be seen as simply a fringe benefit, as automation relies on understanding and endorsement from all levels of a business to work efficiently. A report titled ‘Automation and the future of work,’ published by the British Government in September 2019 noted that the successful implementation of automation “relies on managers and business leaders themselves being able to understand the potential of automation and the impact of technological change.” In this respect, managers will be your biggest ally when embracing automation. Any manager worth their salt understands the benefits of leading through example, and by creating automation ‘advocates’, businesses can ensure teams are comfortable with the impending change. While many busy managers often resist new processes (especially those to do with unfamiliar technology), they usually find that investing a short amount of time getting to grips with an automation platform pays off in the long term.

One of the most frequent pieces of feedback we receive is that an effectively automated platform allows staff to focus on strategy, culture and creativity, with the knock-on effect of automating mundane tasks being felt throughout an entire organisation, not just one relieved individual.

Having a smart, automated platform can also massively reduce the chance of human error at an early stage. This can be disastrous when data is relied upon to make important decisions at a later date. In this respect, having access to accurate information can be a game-changing benefit for decision-makers, particularly those working under increased pressure.

At a time when businesses are facing rapid and unpredictable changes, ensuring your business is equipped with the right tools for success is crucial. And while automation may seem an intimidating change, the huge benefits it can bring to both processes and culture will outweigh any initial concerns. By giving senior staff and their team members alike the ability to embrace smart automation, efficiency will speak for itself, and your business’ success will flourish.

Continue Reading


How robotic technology will disrupt the manufacturing industry



How robotic technology will disrupt the manufacturing industry 3

By Marga Hoek, author of The Trillion Dollar Shift

Robotics technology has the potential to disrupt industries across all sectors – but its impact on the manufacturing industry will be transformative. Not only can robots increase productivity, efficiency and profit margins but adopting this tech for good will be a key way for the manufacturing industry to transition to a more sustainable future.

Driving productivity & efficiency

Manufacturing processes are faster, more efficient, and more cost-effective when humans and robots work together. Studies show that idle time is reduced by 85% when people work collaboratively with a human-aware robot, rather than in an all-human team.[1] Modern robotic automation is key to reshaping production processes to become more efficient and reliable. They deliver significant benefits for companies and investment is often recouped within just 18 months.[2]

Robots in manufacturing can allow businesses to monitor the production lines from anywhere and pinpoint issues quickly, allowing for production to continue smoothly and efficiently, ensuring companies surpass consumers’ expectations of supply chain speed and reliability. Intelligent industrial service robots are an upcoming industrial tool that will amplify manufacturing capabilities and allow businesses to safely operate faster, in places humans could never go, and with cognitive and physical capabilities not yet imagined.

Transitioning to a sustainable future

Robots are a vital way to reduce pollution and emissions from manufacturing operations. For starters, they reduce our reliance on larger vehicles and machines that are harmful to the planet. Robots’ ability to be extremely accurate and minimize errors is also hugely important in sustainability efforts to reduce waste. Robots also aid businesses in their energy-saving process because they do not require as much energy to operate as humans do. Where humans need facilities with sufficient lighting and heat, robots can work under cold and dark conditions. This drastically reduces the amount of energy used in the manufacturing production process. It is estimated that for every 1C reduced in factory heat levels, there is a potential saving of up to 8%.[3] In addition, up to 20% of energy savings can be reached if the plant turns off any unnecessary lighting.

Case Study: GE

Tech giant GE is a brilliant example of how robotics technology can both boost the bottom line and sustainability.

GE is at the forefront of robotics manufacturing technology. Their value proposition is tightly tied to productivity in field service and manufacturing and offers potential cost savings within operations. While delivering industrial-grade service robotic systems that enable automation, productivity and safety for GE and its customers, the company works closely with GE business units, GE customers and strategic partners across the globe to envision, shape and build intelligent robotic technologies from idea to commercialization.

Marga Hoek

Marga Hoek

GE’s recent $125 million investment project at its Decatur refrigerator plant boosted production capacity, added new “smart” technology and increased the site’s workforce.  This includes auto guided vehicles, or AGVs, that move materials through the assembly process and more than 50 robots that perform heavy lifting operations and repetitive tasks.

The expansion project, announced in June 2018, allowed GE Appliances to increase production to meet growing demand for its freezer-refrigerators, which are top-rated in the industry for both quality and reliability. The expansion created 255 jobs, bringing total employment at the plant to 1,300. The project boosts production capacity by 25 % and ensures early compliance with 2022 refrigerant changes, making the Alabama plant a super site for GE. GE Appliances said Industry 4.0 technology additions at the Decatur facility include data visualization, 3-D scanning, rapid prototyping and other smart automation that provides the operations team with real-time data to make better and faster decisions.

Achieving the UN’s Sustainable Development Goals

Utilizing robotics technology within the manufacturing industry can help to meet the UN’s 17 Sustainable Development Goals (SDG) for a healthier planet, to be met by 2030:

SDG 3 – Good Health & Wellbeing: Collaborating with people, service robots work with shoulder-to-shoulder and over long distances, to fulfil dull, dirty and dangerous work.

SDG 8 – Decent Work & Economic Growth: Presenting new growth opportunities for businesses and creating new jobs at manufacturing plants

SDG 9 – Industry, Innovation & Infrastructure:  Manufacturing value proposition of robotics ties tightly to productivity and brings potential cost savings into those operations.

SDG 12 – Responsible Production & Consumption: Providing a new and rich data source for companies to produce products responsibly

Marga Hoek is a global thought-leader on sustainable business, international speaker and the author of The Trillion Dollar Shift, a new book revealing the business opportunities provided by the UN’s Sustainable Development Goals. The Trillion Dollar Shift is published by Routledge, in hardback and e-book. For more information go to




Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Research exposes the £68.8 billion opportunity for UK retailers 4 Research exposes the £68.8 billion opportunity for UK retailers 5
Business2 hours ago

Research exposes the £68.8 billion opportunity for UK retailers

Modelling shows increasing the proportion of online sales by 5 percentage points would have significantly boosted retailers’ revenues during the...

Want to serve your customers better? An effective online strategy is what financial institutions need  6 Want to serve your customers better? An effective online strategy is what financial institutions need  7
Business6 hours ago

Want to serve your customers better? An effective online strategy is what financial institutions need 

By Anna Willems, Marketing Director, Mention A strong online presence matters. Having a strong online presence, that involves social media...

The rise of AI in compliance management 8 The rise of AI in compliance management 9
Uncategorized6 hours ago

The rise of AI in compliance management

By Martin Ellingham, director, product management compliance at Aptean, looks at the increasing role of AI in compliance management and just...

Simplifying the Sector: How low code can aid digital transformation in financial services 10 Simplifying the Sector: How low code can aid digital transformation in financial services 11
Technology6 hours ago

Simplifying the Sector: How low code can aid digital transformation in financial services

By Nick Ford Chief Technology Evangelist, Mendix From online banking to contactless payments and Apple Pay, it has been well...

Why the Boom is Long Overdue (and Here to Stay) 12 Why the Boom is Long Overdue (and Here to Stay) 13
Business6 hours ago

Why the Boom is Long Overdue (and Here to Stay)

By Roger James Hamilton, CEO, Genius Group Virtually every aspect of our lives has been taken over by tech, so...

5 Sustainability Lessons That Are Crucial For Business Success 14 5 Sustainability Lessons That Are Crucial For Business Success 15
Business6 hours ago

5 Sustainability Lessons That Are Crucial For Business Success

By Michael Stausholm, founder of Sprout World ( Sprout World is the eco-company behind the world’s only plantable pencil, with...

Why financial brands need to understand consumer vitality 16 Why financial brands need to understand consumer vitality 17
Business6 hours ago

Why financial brands need to understand consumer vitality

By Carolyn Corda, CMO at data consortium ADARA Our day to day lives have been turned upside down. Office workers have...

Why and how a modern marketing strategy should put customer experience first 18 Why and how a modern marketing strategy should put customer experience first 19
Business7 hours ago

Why and how a modern marketing strategy should put customer experience first

By Jim Preston, VP EMEA, Showpad In 2004, the Leading Edge Forum coined the term ‘consumerisation of IT’, defining a...

Leading from the front - why decision makers must embrace automation 20 Leading from the front - why decision makers must embrace automation 21
Technology7 hours ago

Leading from the front – why decision makers must embrace automation

By Jeppe Rindom, Co-founder & CEO, Pleo Ask any decision maker at a business about admin and you’re likely to...

Business first, not compliance only is the future for accountants 22 Business first, not compliance only is the future for accountants 23
Business7 hours ago

Business first, not compliance only is the future for accountants

By Peter Bracey, MD at Bracey’s Accountants.  The past few months have underlined the need for better business insight to reduce...

Newsletters with Secrets & Analysis. Subscribe Now