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Is transparency a good thing?

Who wants transparency when you can have magic?

Do you watch The Crown? If not, maybe you should as Series 3 is about to begin with Olivia Coleman, a great actress. The first two series weren’t bad either, with Netflix spending $130 million on the season (around $10 million per episode some estimates) making it the most expensive TV series of all time (although Lord of the Rings is about to beat that).

Anyways, in the first series, there is an intense scene where the abdicated King Edward is watching the Queen’s coronation on television. He then makes a speech as she is anointed as follows:

“Who wants transparency when you can have magic? Who wants prose when you can have poetry? Pull away the veil and what are you left with? An ordinary young woman of modest ability and little imagination. But wrap her up like this, anoint her with oil, and hey, presto, what do you have? A goddess.”

It’s like the Emperor’s New Clothes but in reverse. In that story, the Emperor is naked but believes he looks amazing in a fabulously magical outfit that, in reality, does not exist. In this story, the Queen is just a mere mortal but, due to pomp and pageantry, appears a goddess. Now I’m not a Republican – the Royals are great for Brand Britain – but I love the opening line:

Who wants transparency when you can have magic?

And this line has been picked up by many.

The Church

For many of us, the veil has been pulled back and we have been able to see the church for what is. Take away the rituals and priesthood titles, and what you are left with is a bunch of old grandfathers that know how to tell boring, feel-good stories and can sign their names on the checks of the real estate corporation they run.

Government

Transparency is the new political religion shared by a majority of civic activists and an increasing number of governments. The transparency movement embodies the hope that a combination of new technologies, publicly accessible data, and fresh activism can more effectively assist people to hold their representatives to account, which will lead to a re-building of trust in democratic institutions … but while the virtues of transparency are obvious, the risks should not be ignored. The debate over WikiLeaks’ crusade against secrecy brings into full view the moral and security dimension of the problem.

And, unsurprisingly, banking and finance.

In a paper discussing Norwegian monetary policy seen from abroad, Anders Vredin, Head of the General Secretariat at Sveriges Riksbank (the Swedish central bank), opens with:

“Who wants transparency when you can have magic? Who wants prose when you can have poetry?” – Duke of Windsor, in the TV series ‘The Crown’

He writes:

A high degree of transparency and openness is conducive to efficiency. Efficiency – and transparency – in turn should promote legitimacy for the institution and thereby credibility for the target and strategy the central bank chooses to formulate (if the target and the strategy are consistent).

Transparency.

Hide things, cover things up, create mysteriousness and you can have magic. You can create goddesses and grandeur. You can believe that priests, governments and even banks can be trusted.

Take it away, and you have what? Efficiency? Openness, clarity, truth? Horror, outrage and terror?

It’s a difficult balance, but technology is making more and more activities and issues transparent. A quick search for articles on transparency in banking in the last year produces a wealth of results. Here are the first few headlines:

  • Transparency in Central Banking
  • FCA and CMA demand transparency in banking service quality
  • How Monzo used radical transparency to build a bank for the people
  • Do Strict Regulators Increase the Transparency of Banks
  • Will Greater Transparency Through Blockchain Technology Help the Banking Industry
  • Open Banking: The transparency revolution in Finance
  • Banks must ensure fair dealing with customers, greater transparency
  • 2018 EU-wide Transparency Exercise Guidelines for banks
  • European banks ready for fifth transparency exercise

It is a topic I return to regularly in banking and life. After all, if you want sustainable sourcing of food, you need a blockchain for transparency, don’t you? And the same is true in banking.

Using blockchain for transparency “internally and externally can help provide banks the opportunity to replace certain middle- and back-office functions, provide unprecedented cohesion to internal bookkeeping procedures, show an account of consensus with audit trail of transactions that have been cryptographically encoded, create almost real-time settlement and strengthen risk management both ways for the bankers and their clients alike. All these will see cost savings in time and labour requirements, reduced paperwork and elimination of repetitive work, reduction of fraud and illegal activities, and decentralisation among other things.”

But is transparency a good thing?

I guess that’s something we will talk about more in the next year or two as technology transparency changes the game.

 

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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