Blockchain technologies enable new businesses to have a fully digital identity

A Finnish provider of data services Asiakastieto Group, Nordic financial institutions Nordea and OP Group, and Nordic IT services and software company Tieto have jointly with public authorities developed world’s first blockchain technology-based business network that enables establishing limited liability companies fully digitally. Blockchains also enable creating a fully digital identity for new companies and updating it in real-time. 

The business network has been created in co-operation with authorities and businesses, providing a reliable, simple and entirely digital way of founding a limited liability company. Asiakastieto Group, Nordea, OP Group and Tieto carried out all the development work in Finland. The project also included experts from the Finnish Tax Administration and the Finnish Patent and Registration Office.

“We are proud of this pioneering work which has been done in extensive cooperation and at a very rapid pace here in Finland. Our work represents a completely new kind of opportunity to establish a limited liability company digitally. Business-related information can be shared in real-time among a network of trusted partners. This creates entirely new business opportunities,” says Masa Peura, Director of New Business at OP Group.“

During the past couple of years, blockchain-based decentralised platforms have become much more common which gives the opportunity to establish new types of business and trust networks across multiple actors. The public sector has a pivotal role to play as a catalyst for digitalizing the society, as it maintains the base registries that contain verifiable data used in transactions between both public and private organizations.  A prime example of this is the digital company founding process,” says Markus Hautala, Head of Blockchain Solutions at Tieto.

Real-time business information improves trust and transparency

Thanks to blockchain technology, the business network created as a result of this collaboration enables information about a company’s founders and representatives to be updated and made available to every party in the network in real-time. In current systems, it is not possible to update company information to both authorities and financial sector entities simultaneously and in real-time.

In this process, a digital identity is also created for the first time for limited liability companies. This enables the company to be reliably identified and allows the company to fully operate by sharing online verifiable information about itself. For example, the company can authorise its employees to represent the company digitally. Accounts can be opened for the company, it can be registered for VAT and Tax Administration prepayment register, the Finnish Patent and Registration Office can register the company, and the company can manage its shareholder register – all this entirely digitally.

“In the future, more and more Finns will be self-employed as entrepreneurs, and this pioneering development will make it significantly simpler to establish a limited liability company. Digital identity will also make the process of setting up a company more reliable, reducing the possibility for fraud. Through our technology collaboration, we can improve business transparency and trust between different parties,” says Heikki Koivula, Head of Business Information Services at Asiakastieto Group.

While the network platform is developed in collaboration between Finnish industry players, it could also be used globally. The technology solutions are not geographically limited. The platform is based on open source Corda and Hyperledger Indy blockchain technologies. 

“This project combines for the first time two major blockchain platforms as a practical implementation. Corda’s process and contract-centric architecture forms the backbone of the network between the different actors, while Hyperledger Indy provides a decentralised platform for exchanging verifiable data. The features of the platforms complement each other perfectly,” says Ville Sointu, Head of DLT & Blockchain at Nordea.

The newly-developed blockchain-based business network is a pilot project but further development is planned in an even wider-ranging collaboration between Finnish industry players.

Asiakastieto Group is one of Finland’s leading providers of business and consumer information services. The Group’s products and services are used primarily for risk management, financial management, decision making, sales and marketing. At the end of 2017, the Group had approximately 19,500 customers, 10,500 of which were contract customers. The Group serves several sectors, with finance and banking, wholesaling and retail, and expert service companies among the largest of these. In 2017, the Group’s net sales were EUR 56.2 million, and it had 156 employees at the end of 2017. Asiakastieto Group is listed on Nasdaq Helsinki exchange under the stock symbol ATG1V. www.asiakastieto.fi 

Nordea creates robust relationships with customers and society through strong commitment. We offer banking services that enable people to fulfil their goals and realise their dreams. Nordea is the largest bank in the Nordic countries, and it is among the 10 largest financial service companies in Europe in terms of market value. Nordea has approximately 11 million customers. Nordea’s shares are listed on Nasdaq’s stock exchanges in Helsinki, Copenhagen and Stockholm. Find out more at nordea.com. 

OP Financial Group is Finland’s largest financial services group whose mission is to create sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. OP Financial Group consists of about 160 member cooperative banks, its central cooperative OP Cooperative, and the latter’s subsidiaries and affiliates. The Group has a staff of 12,000 and 1.8 million owner-customers. www.op.fi

Tieto aims to capture the significant opportunities of the data-driven world and turn them into lifelong value for people, business and society. We aim to be customers’ first choice for business renewal, by combining our software and services capabilities with a strong drive for co-innovation and ecosystems. www.tieto.com