The Intelligent Blockchain and AI: Building the Decision Vault with Blockchain

A few months back I had the opportunity to watch a wonderful webinar delivered by Gary Richardson, managing director of London-based 6point6. In that webinar, Gary made a strong case for the synergies between blockchain and artificial intelligence. That was also the first time I heard the term “decision vault” in connection with blockchain. So, I wanted to share with you some key concepts and dots I connected after doing some research about blockchain, AI, state management, business processes, decision models, and how all those elements converge into the cool concept of blockchain acting as a “decision vault.”

First of all, let’s establish a few well-known terms and concepts before delving into new ones. First of all, artificial intelligence (or AI for short) is comprised of the programming and algorithms that allow digital devices to access, combine, and share data to learn, explain, and forecast events, processes, and trends.

There are three important trends related to AI that have emerged over the last couple of years: AI proper, RPA, and cloud-based business process management.

AI Trend #1 – Artificial Intelligence Proper

As more data is produced by pervasive computing, bio-informatics, and big data, the only way to make sense of all that information is by leveraging AI. Predictive analytics will be the key source of value going forward when it comes to data, and AI will facilitate the process. Other AI-based platforms include natural language, language translation, speech recognition, chat bots, image and video recognition, and machine learning, just to name a few. All these AI capabilities are, in my opinion, the foundation for what I call the “democratization of specialized knowledge.” The big four cloud platforms (Google, Amazon Web Services, IBM, and Microsoft) implement variants of foundational AI capabilities for developers and businesses.

AI Trend #2 – Robotics Process Automation

The second AI trend is robotics process automation or RPA, an emerging form of business process automation technology based on the notion that software robots or artificial intelligence workers will execute business processes faster and with more accuracy. For example, KPMG, one of the largest accounting and audit firms in the world, is using RPA to handle the more routine, “robotonous” tasks. RPA also helps KPMG with complex, critical tasks that auditors want to keep a spotlight on. Is that putting auditors out of work? Au contraire! Audit professionals have more free time to engage clients in more value-enhancing activities, analyze data, and make better recommendations/forecasts. That results in a win-win for both KPMG and the client.

AI Trend #3 – Cloud-based Business Process Management

The third AI trend, and a rapidly evolving space, that I find significant is cloud-based business process management and its cousin, business process as a service or BPaaS. Rather than implementing business processes with the constraints of packaged applications and physical infrastructure on-site, they are opting for building partial or entire business value-delivery processes in the cloud, using a virtual distributed model, with no ties to any single application. Cloud-based business process management is the combination of several technologies, such as Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). With these technologies, participants in the business process are able to access business process capabilities, anywhere, anytime, on any device.

Business Process Management and AI

You might be asking by now: “Why should I care about AI and these trends? I thought this article was about blockchain!” We’ll talk about blockchain in a moment. I wanted to highlight AI in the context of business process management because end-to-end business solutions of the future will use these three emerging AI trends to reduce the number of business processes. More relevant: With AI, how business decisions within these processes are made will change significantly. Here is the key concept: The current business decision-making approach relies on breaking one or several business processes into smaller, incremental process flows that facilitate human decisions.

The process goes like this: We rely on interfaces to find and acquire data related to the business process. Next, we use our experience, business logic, flows, and the “rules of the road” to interpret the information and make decisions. When we face ambiguity or new scenarios, we slow down the process to take a closer look. In some cases, we retrieve past experiences or other loosely connected information to make sense of the data and make a decision. Once a decision is made in a given process flow, those decisions generate outputs to the next business process. The process repeats as long as needed until a final decision is made.

The radical aspect of using AI is that machine learning flips that whole business decision-making approach on its head. AI finds and acquires the data in one iteration, and makes the decisions based on learned experience within a machine learning model. AI takes an overarching view and makes overarching business decisions with limited to no human intervention. That is how AI is reducing the number of business processes while delivering more accurate decisions and consequently, more value.

Now, let’s talk about the role of blockchain

As a refresher, blockchain is an architectural concept that offers an open, distributed ledger that can record transactions between parties efficiently and in a verifiable and permanent way. Before going any further, let’s level-set one of the capabilities of blockchain technology: smart contracts or chain code. I believe that smart contracts and AI are playing a significant role in business process automation. In my opinion, smart contract technology is not yet ready to hold and manage complex business logic; they are not that smart. Smart contracts, however, are more than capable of facilitating the process flow with AI as the orchestra director or traffic officer. Bottom line: When it comes to making decisions within the flow, I advocate that it should be the role of AI, not of smart contracts.

The most significant and valuable integration point of blockchain and AI is that blockchain can be a state management engine. Using blockchain’s immutability and traceability capabilities, blockchain itself can capture the state changes or decisions that are made along the business process flow. Blockchain can capture the decision that was made along with references to the decision’s inputs and outputs. That is where the term “decision vault” is relevant.

But wait, the decision vault gets better!

With blockchain acting as a “decision vault,” we now have the ability to save or preserve a copy of the entire model that was used to make the decision. Just imagine all the value creation possibilities as result of having permanent and complete traceability about how a decision was made, the input and output parameters the process flow relied on, and the business rules used during the process.

Let’s say that you are applying for a mortgage loan. How different do you think your experience would be if the financial institution that is processing your application knows that a distributed blockchain is not only capturing the decisions and the “boring” parameters (e.g., demographics, credit history, and income), but also the decision model and business rules as well? I believe that having that level of traceability, immutability, and transparency will make or break many value-delivery business models in the near future.

I hope by now you have a better understanding of the potential synergies between AI and blockchain. As always, my intention is to find better and more efficient ways to create value using leadership, strategy, innovative thinking, and emerging technologies. What and Why First.

Now, it is your turn. What are your thoughts about the convergence of AI and blockchain I just described? What new or existing value propositions or business models do you think will be affected by AI and blockchain?

Until next time, cheers!

Josué Batista is a business technology and strategist, solutions architect, international speaker, and writer with concentration on emerging technologies in the space of Distributed Ledger Technologies (Blockchain), Artificial Intelligence, and the Internet-of-Things.

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