Capital One is looking to use blockchain for securing user authentication methods for instances such as banking security.
The US banking giant filed a patent application with the U.S. Patent and Trademark Office in June last year according to Coinbase. Its aim is to create a blockchain-based system that receives, stores and retrieves encrypted user authentication data said Coinbase, which cited a filing on the patent application was released late last week.
It describes the proposed idea as “a distributed, non-reputable record of authentication interactions” that allows users to authenticate themselves across multiple platforms.
The system would authenticate or reject the user based on the data, which is kept securely on the blockchain. In the filing, Capital One said the platform would reduce the time and resource burdens for institutions when bringing on new clients. It would please users that “resent” having to authenticate themselves as they move between different financial firms.
It also said financial firms “may, therefore, benefit from a collaborative authentication system that handles authentication interactions for multiple institutions.”
In 2016, Capital One hired WilmerHale counsel Elijah Alper to take on a role as a FinTech and blockchain specialist. A veteran of almost seven years at WilmerHale, Alper is a well-known figure in the cryptocurrency and blockchain space. He has also advised clients at the firm on the technology.
Capital One also recently signed a data sharing agreement with Finicity, a provider of real-time financial data aggregation and insights. The deal enhances access and security through Capital One’s Customer Transactions application programming interface (API), and as a result, Capital One customers will now be able to more securely share financial data with the third-party apps and services that Finicity supports
Its move towards blockchain comes at a time when major banks are devoting greater resources to exploring opportunities in the space.
Bank of Montreal’s capital markets team recently begun testing the use of a blockchain platform for a pilot fixed income issuance transaction. The technology is intended to enable cost reduction in several areas including compliance, financial reporting, security clearing and settlement of cash transactions.
Earlier this year, South Korea was reported to be launching a new blockchain-based ID verification system for domestic commercial banks, while the Italian Banking Association (ABI) opened a pilot project on blockchain-based interbank reconciliations.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
