DENVER–CULedger, the CUSO that is leading a blockchain initiative, has announced a collaboration with IBM to pioneer new blockchain-based services to “help credit unions provide a better experience for members.”
CULedger said it will work with IBM to use permissioned blockchain technologies to create an
“immutable audit trail” that can be used to create new business models and transform existing business processes for credit unions. The companies also intend to help drive greater financial inclusion by extending reach to a broader range of new members.
CULedger said the adoption of blockchain technology will help build CU momentum among all demographics, including small and medium enterprises that currently lack access to financial services.
“By creating a permissioned blockchain network where services can be shared among all credit unions, CULedger will improve services such as identification authentication, regulatory compliance around know-your-customer (KYC), lending and payments, while making it easier and more efficient for consumers to conduct any interactions that require authentication,” the organization said.
“A cooperative model that helps improve the member experience while benefitting all credit unions is the ideal approach to ensuring the next wave of financial innovation for the credit union industry,” said John Ainsworth, CEO and president, of CULedger, in a statement. “We are creating a network through which all members can join and access new services and enabling credit unions to become even more competitive while addressing new market dynamics where members are demanding even more for their financial services provider.”
Digital Credential
The CUSO said credit union members worldwide will also have access to a CULedger-issued digital credential, called MyCUID, that adheres to the privacy-by-design requirements of self-sovereign identity supported by the Sovrin Foundation. MyCUID will help credit unions support shared financial services which allows members to conduct transactions among any credit union on the network, CULedger said.
In making its announcement, CULedger pointed to Gartner research that blockchain’s potential value to the enterprise is expected to grow to more than $360 billion by 2026, then surge to more than $3.1 trillion by 2030.
“Credit unions will be able to cooperate and receive shared value from quickly exchanging sensitive data in a permissioned, individually controlled and transparent way. This decentralized approach using blockchain helps put the customer in control of their own identity,” said Marie Wieck, general manager, IBM Blockchain. “The work underway between CULedger and IBM will also lay the foundation for new kinds of services and collaboration among credit unions as we work together to scale and extend the network.”