It has just been announced that an IBM Researcher has solved a thorny mathematical problem that has confounded scientists since the invention of public-key encryption several decades ago. The breakthrough makes possible the deep and unlimited analysis of
encrypted information – data that has been intentionally scrambled -- without sacrificing confidentiality.
This has massive implications for the financial services sector.
1) Multinational regulatory supervision: Any effective multinational regulatory entity is going to need to process complex analytics on confidential data from multiple sources and multiple regulatory domains. Until now individual national privacy and data
protection laws have prevented any pooling of data across regulatory boundaries for this purpose.
2) Cloud computing: it strengthen the business model of "cloud computing," where a computer vendor is entrusted to host the confidential data of others in a ubiquitous Internet presence. It might better enable a cloud computing vendor to perform computations
on clients' data at their request, such as analyzing sales patterns, without exposing the original data.
Coincidentally IBM launched a servey only yesterday (reported here at Finextra) that was conducted by IBM, in conjunction with the Securities Industry and Financial Markets Association (SIFMA), to better understand attitudes toward both recent business and
IT challenges in the industry and the priorities for future IT spending, given current market conditions. The survey reveals a significant increase in the level of interest in new technologies and computing models, in particular cloud computing, as firms seek
to overcome budgetary restrictions and skills shortages.
Will this be enough though to finally herald the dawn of widespread cloud computing adotion by banks?? What do you think?