Verifiable Credentials in Financial Services
Ensure compliance and simplify access to financial services using Dock’s blockchain technology
Identification and compliance practices are extremely important in providing financial services. Finance is one of the most heavily regulated industries and requires access to accurate information. Financial institutions spend enormous sums and resources towards ensuring they are compliant as fines for non-compliance can be staggering.
Compliance mandates are also a burden for customers who are required to undergo tedious onboarding and underwriting processes, and systematic failures in these processes can create a barrier to people trying to access much needed financial services. Furthermore, financial institutions hold massive databases of personal information which can present a treasure trove for hackers.
Take for example an individual who is required to undergo a compliance screening in order to open a bank account. Using traditional methods, this involves a customer submitting their personal details, including a social security number, on an online or hardcopy form which is stored in a large database by the financial institution as well as shared with one or more third parties which conduct the know your customer (KYC) and credit checks. The KYC check could take days or even longer if it requires additional manual checks. The individual has no control over how their data is secured by the financial institution or which vendors can access the data.
Dock provides the technology to solve these verification challenges in the financial industry. By leveraging Dock’s public network and tooling, verifiable credentials can be issued to provide a spectrum of financial and identity information that individuals and companies can present in order to unlock access to services. Dock’s toolset can be used to create credentials by hashing the data, such as identity documents or credit history, and embedding the hash into a JSON file which can then be anchored to the Dock network.
The issuer, such as a KYC company or financial institution, would create a decentralized identity (DID) that is included in the credential and used to authenticate its validity. Recipients of the credentials would then be able to present them to any financial institution, enabling the institutions to instantly verify that the data included in the credentials is legitimate. A credential holder can reuse and reshare these credentials across any service that requires verifying the same data, without requiring any involvement from the original issuer as well as removing the possibility for potential mistakes when using manual verification methods. In addition, the data provided in the credentials is cryptographically secured and tamper proof and can be verified without requiring the financial institutions to acquire or store the data. As a result, the sensitive data that’s being shared by users is protected from data leaks or hacks.
Dock’s credentialing technology can be used for a variety of credentials in the financial sector including KYC and anti-money laundering checks, demonstrating financial history for loans and insurance applications, sharing a credit score, and accessing investment opportunities. In addition, current compliance processes are very costly, which can be a barrier for financial startups and tamper innovation as well as prevent financial companies from expanding their services to populations who may need them the most.