Paul Taylor, former head of the text-to-speech group at Google and a serial entrepreneur is rolling out a new Blockchain-based system coined Vault OS which he says will be the first ‘next generation’ operating system for banks.
Built from the ground up by Thought Machine, Taylor's East London Fintech firm, has worked on this project in stealth for two years. Established by a core of ex-Google engineers the team of of 50 has created Vault OS – a private Blockchain that has cryptographic ledgers for watertight security, and runs in the cloud as a software-as-a-service that helps banks to scale from one customer to millions without expensive in-house data-centers.
“Most of the banks are using systems that were written in the 80s and 90s, and they just are not ready for the security-conscious internet app age at all. What the blockchain does is provide a very secure way of storing transactions,” Taylor told Reuters.
Apart from this, it handles millions of transactions per second, captured in real-time on a single unified ledger. The system also supports a complete array of bank services like current accounts, mortgages, loans among others.
As you’d expect of an operating system, Vault OS is hugely flexible and handles any standard banking functions or business models. Best of all, it employs smart contracts and machine learning to enable banks to offer a vast array of financial products – or roll out new ones in days. It is 100% future-proof.
Vault OS provides banks with relief from the challenges of compliance because its treasury and risk functions provide accurate and up-to-date reporting. Every transaction is reported in real time and so within seconds of, say, a customer swiping a credit card, the effect appears on its balance sheet. This means bank officials can determine its exact financial position at any moment. These tools are in the core of Vault OS, making implementation of capital-adequacy standards such as Basel III automatic.
On handing RBS a record £56million fine in 2014, Andrew Bailey, the chief executive of the Prudential Regulation Authority, warned of a “very poor legacy of IT resilience and inadequate management of IT risks”. The premise of legacy systems failing is unthinkable but Vault OS fixes broken banking forever.
BENEFITS FOR BANKS
- Scales from one customer to tens of millions without fixed costs because it runs in the cloud
- Fundamentally secure due to private blockchain-style technology and cryptographic ledgers
- Supports full array of bank services (e.g. current accounts, mortgages, loans, credit cards)
- Flexible set-up for any type of bank, from pure digital challengers, building societies, private banks, business banks, or international universal banks with branches or call centres
- Handles millions of transactions per second, captured in real-time on a single unified ledger
- Accurate risk-reporting and full compliance with capital-adequacy standards such as Basel III
BENEFITS FOR CONSUMERS
- Reliable banking services that accurately group all spending or income into 60 categories
- Real-time transaction information as opposed to current ‘batch-processing’ overnight
- Comprehensive overview of all personal finances with insights including ‘safe-to-spend’
- Smart contracts enable genuinely bespoke financial services such as ‘payment holidays
ABOUT VAULT OS
Vault OS is the world’s first next-generation ‘operating system’ for banking. This is a core-banking toolkit that enables a bank of any age or size to deliver end-to-end financial systems that run smoothly in real-time. Vault OS was created with private blockchain-style technology and cryptographic ledgers for watertight security. Its risk-reporting features automatically implement new compliance standards
ABOUT THOUGHT MACHINE
Thought Machine was founded by Paul Taylor, one of the few entrepreneurs to successfully found and sell a UK company to Google. The firm is built around a core of ex-Google engineers, eager to bring their experience of building fault-free systems able to handle billions of transactions per day into retail banking. The team of 50 have years of experience in financial services, working at top banks such as Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS. The whole team is based in east London.
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