How Decentralized Identity Will Affect Banks and Other Financial Institutions

Digital Identity Solutions

Decentralized identity solutions are swiftly changing the way individuals share, store, and manage their personal data. Wondering what is decentralization in blockchain? Decentralized identity blockchain refers to the transfer of decision-making power and control from a centralized authority to a distributed network. There are several blockchain decentralization benefits, making such identity solutions ideal for organizations globally. But how will these affect banks and other financial institutions? Let’s find out.

Decentralized Identity Solutions’ Impact on Financial Institutions

There are two decentralized identity management solutions: verifiable credentials and decentralized identifiers (DIDs).

Verifiable credentials are blockchain-based digital certificates that follow the rules established by the World Wide Web Consortium. They are tamper-proof, machine verifiable, and employ privacy-enhancing technologies like DIDs. Moreover, a verifiable credential trust triangle enlists an issuer, a holder, and a verifier to establish trust in these certificates.

For more information on blockchain-based digital certificates, here’s the ultimate guide to verifiable credentials.

Blockchain decentralized identity, also known as DIDs, helps digitally identify an individual’s relevant information without them having to share their personal and sensitive information for no purpose.

For example, if a potential employer (verifier) needs to check an applicant’s (holder) graduation scores, the applicant can simply share the scores with their name and other required information. But they won’t have to disclose other sensitive information like their social security number.

The best part, though? Besides individuals having complete control over their data, there are no middlemen involved in the entire process. Once individuals create a DID and register and store it on blockchain, they can share and manage them based on their discretion.

The shift to these decentralized identity solutions means that banks can secure their documents through verifiable credentials and protect their sensitive information from cybercriminals. On the other hand, customers can share only the required information and stay in control of their information without worrying about data breaches.

Wondering how to go about issuing digital certificates for your financial institution? Sign up on ProofEasy today! Our patented blockchain and QR code solution has been engineered to help organizations issue, manage, store, and share verifiable credentials instantly. There’s no learning curve involved.

Plus, you can easily integrate the solution with your existing IT infrastructure since we have a customizable API. Oh, did we mention the best part yet? The solution is competitively priced and designed to help organizations of all sizes fight data fraud.