IBM has partnered with Denver-based credit union service organization (CUSO) CULedger to set up new blockchain-based services in order to help credit unions provide a better experience for members. CULedger is going to work with IBM to use permissioned blockchain technologies in order to create an immutable audit trail that can be used for creating new business models and transforming existing business processes for credit unions.
And the two companies are also intended to help drive greater financial inclusion by extending reach to a broader range of new members. By creating a permissioned blockchain network where services can be shared among all credit unions, CULedger will improve services like 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.
Currently, the credit union industry serves more than 260 million members worldwide with over $1.7 trillion of circulating assets. And the adoption of blockchain technology will help build continued momentum among all demographics along with small and medium enterprises that currently lack access to financial services.
“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 CULedger’s CEO and president John Ainsworth. “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.”
Credit union members worldwide are also going to have access to a CULedger issued digital credential called MyCUID — which adheres to the privacy-by-design requirements of self-sovereign identity supported by the Sovrin Foundation. And MyCUID is going to help credit unions support shared financial services, which allows members to conduct transactions among any credit union on the network.
According to a recent Gartner report, the potential value of blockchain to the enterprise is expected to grow more than $360 billion by 2026 and then surge to over $3.1 trillion by 2030. And blockchain technology is being used to help address consumer demands for safer, faster, and more efficient transactions as the financial services industry continues to evolve.
“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,” added IBM Blockchain general manager Marie Wieck. “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.”
IBM is considered the leading enterprise blockchain provider as the company has broken barriers in transaction processing speeds and developed the most advanced cryptography to secure transactions. And the company is contributing millions of lines of open source code to advance blockchain for businesses. Plus IBM has been working with hundreds of clients across financial services, supply chain, government, retail, DRM, and healthcare to implement blockchain applications since 2016.
The initial services on CULedger’s blockchain network is going to be available to credit unions worldwide starting later in 2019.