Tackling the crisis of confidence in the on-line world

Recent revelations as to the scale and nature of data losses in both public and private sectors, like events at the Northern Rock, show that current information governance regimes are not fit for purpose. So who can be trusted to act?

Last night the council of the Real Time Club, discussed whether to have a Facebook group. Those present agreed that “secure on-line social networking” was an oxymoron. The club has not had a “leak” in its forty years history and did not intend to start now. Later in the evening I was, however, given permission to blog on the discussion over the dinner table, while observing the Chatham House Rule – i.e. using the ideas but giving no idea as to who said what.

The topic was what happened at Northern Rock, but we never got round to discussing allegations as to the role of ICT in the final debacle. We were far too busy discussing the systemic failures of corporate governance and responsibility at the top of almost all the organisations involved and the parallels with information governance and its regulators. It was an evening of well informed “character assassination” – and the only survivors were the Bank of England and the Information Commissioner.

That was part of the good news: even the most cynical of commentators still trusts the innate competance of some parts of the system, provided they are allowed (and resourced) to do their jobs propeerly.

The other part of the good news was the common view that the scale and nature of the interlinked crises, properly recognised, gives the opportunity (as well as necessity) to take action on a whole series of systemic problems.

But first we needed to recognise reality.

For example, Northern Rock was not the first bank run in a hundred years. There were similar runs on building societies in the Midlands in the 1980s. The difference was that “the inability of the Financial Services Authority to properly regulate a second tier institution of no importance to anyone other than Newcastle United supporters made it look more like the Keystone Cops than Hercule Poirot”.

The business model of Northern Rock had long stood out like a sore thumb (“renting out its loan book as opposed to selling it”, “Hertz nor Harrods”) in a sector (the UK housing market) that also stood out like a sore thumb: “Apart from Bangladesh no other country in the world has screwed up its housing market as thoroughly as the United Kingdom”.

In addressing the problem we also had to address that (which we had imported from the United States) of “Fin de Siecle Capitalism” …”interlocking remuneration committees” across large organisations (public as well as private) “organising mutual pay-offs for when the gravy train hits the buffers.” The failure of otherwise respected journalists to investigate and unravel this phenomeon also came in for criticism.

It was an evening of splendid hyperbole. One exchange began “We sent a train driver to jail for falling asleep at the wheel …” and ended “but you can’t send a regulator to jail for a metaphor”.

It was also an evening of insight and revelation: I had not previously appreciated that Basel II would serve to conceal, rather than reveal the liquidity problems that are expected to be the “real” threat to financial stability over the next few years. It is rather like the Generals preparing to fight the last war but one. And the EU approach is even more surreal.

Meanwhile ICT professionals “were facilitating the retreat from reality” into a “Second Life” of illusion, fantasy and the use of “computer-assisted sonking” (the “scientification of non-knowledge”) to “transmogrify dross into gold”.

My first blog entry, “The silent majority gets what it deserves, ignored“, was about the responsibility of information systems professionals to apply their skills to real world problems. I am pleased to note that most of the ICT industry bodies are now discussing how to address the current crises of confidence in the on-line world. I only hope that they can indeed work together, mobilise the support necessary from both users and suppliers and use the opportunity to help us all leapfrog into a new world of “confidence based on knowledge”, as opposed to “complacency and arrogance based on illusion and ignorance”.

P.S. Those wondering which channels to influence they could/should use might care to start with the short guide to political players in the ICT world. This was originally drafted to help brief a visiting party of Congressional “staffers” working in the offices of the members of the US Internet Caucus. I would also be most grateful for suggested changes to correct any errors and ommisions.