Fiscal Service Announces Launch of Two Innovative Projects
Date: October 17, 2019
The Office of Financial Innovation and Transformation (FIT) launched a pair of projects that aim to better understand how distributed ledger technology (DLT) and artificial intelligence (AI) can improve financial management and the government's interactions with its customers.
Building on two earlier blockchain projects, FIT is partnering with the National Science Foundation (NSF) and the Fiscal Service's Payment Management division to carry out a proof of concept to acquire "hands-on" experience for how DLT might improve processes that ultimately lead to a Federal payment. Mike Wetklow, Deputy Chief Financial Officer at NSF said, "Exploring new and alternative ways to be more efficient and reduce administrative burdens for our staff and our partners in the Research Community is a priority for us. Distributed ledger technology is showing promise for doing both” - but we need a better understanding of the technology and where and when it adds value. That's what this project aims to do."
FIT's previous proofs of concept included building prototypes for managing, transferring and tracking mobile phones and software licenses. These earlier efforts provided FIT with a foundational understanding for how DLT works, the associated benefits and challenges and an understanding of best-fit use cases. Unlike these previous projects, this proof of concept will be the first time FIT will apply blockchain technology to a financial use case.
The proof of concept will involve tokenizing (digitally representing) and transferring payment authorizations within a simulated letter of credit system. Letters of credit, which are frequently used to award Federal grants, are an advance payment method that authorizes recipients to request an electronic advance of funds. The project will be carried out in a permissioned, DLT network and aims to better understand the impact on settlement times and payment request workflows, how enhanced transparency could alleviate financial reporting burden for both prime and sub-recipients, and improve the customer experience.
Similar to the DLT proof of concept, FIT is launching a project to learn how AI can provide a more seamless customer experience. David Copenhaver, Executive Director of Treasury's Administrative Resource Center (ARC) said, "We continually look for new ways to improve the experience of the people that use our services. Customers expect that their interactions with the Federal government are seamless and secure. At the end of this project, we'll have a better understanding if AI and chat technology can help reach that goal."
This project comes on the heels of a previous effort FIT carried out where it evaluated some of the customer pain points related to Fiscal Service contact centers. That effort served as the jumping off point for where AI, specifically chat technology, may help to alleviate some of the pain points in the customer journey. "FIT is responsible for identifying and promoting innovative solutions to improve federal financial management," says Adam Goldberg, Executive Architect of FIT. "Both of these projects aim to evaluate the value proposition new and emerging technologies can offer financial management. We are excited to get started and to share what we learn with the broader FM community"
To find out more about FIT, visit fiscal.treasury.gov/FIT. FIT is part of the U.S. Department of the Treasury's Bureau of the Fiscal Service, whose mission is to promote the financial integrity and operation efficiency of the federal government through exceptional accounting, financing, collections, payments, and shared services. To find out more about the Fiscal Service, visit fiscal.treasury.gov or follow us on LinkedIn and Twitter.