‘Open Banking 3.0’ – The Fusion of Blockchain, Self-Sovereign Identity and Digital Banking

An especially potent use case is the intersection of a number of accelerating trends, in this case the Blockchain, Self-Sovereign Identity and Open Banking.

From OAuth to SSI

At the heart of this scenario is the ongoing evolution of Digital Identity notably Self-Sovereign Identity, such that it forms an “Identity Metasystem“, will power an equivalent step change leap forward for all industries using these technologies, banking being one of them.

Perfectial provides an introduction to the SSI concept and Zaid Mahomedy of Chainstack explores the specific potential of it’s application to Open Banking here.

He provides an excellent introduction to the Open Banking sector, and describes the primary concerns holding up adoption, notably data privacy concerns, and from this explores the role a permissioned Blockchain and Self Sovereign Identity system could play in addressing them, through enabling a more granular control for users of how their personal data is shared

To dive to a detail level we can consider our Starling Bank case study, where it identifies how they are using the OAuth 2.0 protocol to achieve the integration with their catalogue of banking app plugins. (see from 43m:10s in this video).

As Timothy Ruff CEO of Evernym describes in this blog, Self-Sovereign Identity represents a further evolution again, a third generation of Identity-centric data integration where OAuth represents a second.

SSI could evolve this component part of inter-connectivity, enhancing Open Banking with more sophisticated capabilities in line with this generational step change improvement, what we could think of as ‘Open Banking 3.0’.

Central to SSI are ‘DIDs’ (Decentralized Identifiers), which as explained here can be stored on the public Blockchain to enable the verification of credentials, prior to and enabling the establishment of relationships such as digital banking.

You May Also Like

About the Author: CBPN Editor

Leave a Reply

Your email address will not be published. Required fields are marked *