Since the second half of 2018 the number of pilots and proofs of concepts that leverage Blockchain or Distributed Ledger Technologies in the Banking industry is rapidly increasing. What was once described as nothing more than a glorified spreadsheet (by people with a great track record on the economics field but not necessarily in the technology world) suddenly is replacing legacy systems to solve real use cases that bring tangible value to the end customer.
The crypto-winter ousted most of the people in the industry that were only worried about the price of cryptoassets going up or down, lousy ICOs and over-promising whitepapers and suddenly left a small number of companies (everis and NTT DATA included) left to work on the enterprise-grade view of Blockchain and DLT, that is the one dealing with bringing the technology to highly-regulated industries.
One of the banks leading the pack in terms of number of ongoing Blockchain and DLT projects is the dutch group ING. Their success in this field is at such a good level that in today's financial results announcements the bank’s blockchain initiatives were worthy of a notable mention by CEO Ralph Hamers. The company has been active in progressing Zero-Knowledge Proofs, an important privacy tool used in blockchains.
Ralph Hamers said: “We took several steps in blockchain and distributed ledger technology to further improve our offering and client experience,” said Hamers in the statement. “For example, we made codes we had created to ensure data privacy even faster, safer and easier to use with a new release called Bulletproofs. These codes, which are open source, were successfully used in the first quarter in a proof of concept with a university in the Netherlands.”
Launched in 2017, zero-knowledge range proof (ZKRP) enabled numerical data to be validated within a number range. For example, a mortgage applicant could prove that their salary sits within a certain range without revealing the exact figure. A year later, ING took the solution a step further and introduced ZKSM, which goes beyond numerical data to include other types of information, like locations and names. This made the new code, ZKSM, more powerful. For instance, banks could validate that a new client lives in a country that belongs to the European Union, without revealing the country. Simply put, this allows for information to be shared without revealing contextual details.
Following a trend now widely adopted in the industry Bulletproofs code is open-source, which means that other interested parties in the development community are able to use, access and even contribute to the solution.
For being a glorified spreadsheet it looks like this Blockchain and DLT thing might be useful after all...