Credit unions are finally getting involved with blockchain technology. By utilizing blockchain authentication, credit unions can remove all of the various challenge questions (part of KYC) that have become a normal and annoying part of authenticating. Best of all, customers can utilize their blockchain credentials with any entity that is participating in the program. Meaning, they won't have to go through those challenge questions anymore.
The effort is being driven by two credit unions — UNIFY Financial Federal Credit Union (Torrance, CA) and Desert Financial Federal Credit Union (Phoenix, AZ). They are co-owners of a company called CULedger, which created the blockchain authentication technology being used by over 20 credit unions. The application is called MemberPass and provides customers with digital authentication credentials. So far, around 500 customer credentials have been issued.
The benefit that this type of contactless authentication provides is speed. Without the new authentication scheme, transactions would take ~90 seconds for low-risk authentication and up to three minutes for higher risk authentication. Those times have dropped to just 12-15 seconds. The authentication works through the customer's phone. Customers sign up with MemberPass on their phone or in person. Next, a member service rep walks them through the authentication process. From there, the customer's phone and credit union are able to authenticate without the involvement of representatives.
“UNIFY has the public blockchain key and the member has the private key,” Gordon Howe, president, and CEO of UNIFY, said to creditunions.com. “That’s how they link up.”
Customer credentials are stored in a digital wallet called Connect.me. MemberPass does not collect personal information from the customer. Additionally, the customer is in control of their identity. As they go to other third-party sites/entities that use MemberPass, they are able to easily authentication without having to create a new identity (i.e., user).