U.S. banking giant Capital One is working on using blockchain technology to usher in more convenient and secure user authentication methods for instances such as banking security.
In a continuation of a patent application submitted to the U.S. Patent and Trademark Office (USPTO) back in June 2017, Capital One sets out a blockchain system that will receive, store and retrieve encrypted user authentication data, according to a filing released Thursday.
The proposed idea is described as "a distributed, non-reputable record of authentication interactions" that allows users to authenticate themselves across multiple platforms, but limits how much personal information is shared between them.
In effect, the method retrieves identification data on a user when they commence the authentication process (assuming the user has a profile set up). The system will authenticate or reject the user based on the received authentication information, but the user data itself is kept securely on the blockchain.
The claimed invention is said to potentially reduce "time and resource burdens" for institutions when on-boarding new clientele. Furthermore, the filing adds, it would be a boon for users that may "resent" having to repeatedly authenticate themselves as they move between different institutions.
Thus, Capital One says, both institutions and clients "may therefore benefit from a collaborative authentication system that handles authentication interactions for multiple institutions."
One business-focused use case for the invention is stated as fulfilling "statutory or regulatory requirements, such as 'Know Your Customer' requirements," which most financial institutions around the world are legally mandated to abide by to reduce the risk of money laundering.
Capital One image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.