Banking News

Credit union provider CULedger goes live with blockchain identity

biometric fingerprint identity

Last week, CULedger announced that three more credit unions had joined its MemberPass pilot program, the blockchain-based credentialing solution, which is also now in production commercially. The new pilot additions are Achieva Credit Union, HawaiiUSA Federal Credit Union, and Eagle Express Federal Credit Union.

Initially launched as a blockchain consortium of U.S. credit unions, CULedger later became a credit union service organization (CUSO). Last year, the firm raised $10 million in Series A funding. 

MemberPass is the rebranded version of CULedger’s flagship product MyCUID, the KYC-backed digital identity solution. It enables members to control their identity and securely verify themselves with their credit unions.

This is particularly important for people who travel around the U.S. to regions where their home credit unions don’t have branches, and they need to use another credit union. It also enables verification on the phone and even for using ATMs.

To this end, the firm has developed a Sovrin-based mobile application to ensure the authenticity of identity. CULedger plans to scale this solution to other blockchain-enabled products offered by it.

 “By producing this global digital credential to showcase one’s identification outside of the normal KBA (Knowledge-Based Authentication) approach, credit unions and their members will benefit from a safer experience with the knowledge that their information is secure and, in their hands,” said John Ainsworth, president, and CEO of CULedger.

The Denver-based firm initially worked with Evernym for the development of MemberPass, and also uses the Sovrin Identity Network. The goal is to secure the verification of credit union members by using voice recognition or biometrics, instead of the legacy username password system. CULedger says this could potentially reduce fraud and decrease the overall call time, which requires members to verify themselves by stating their birth date, or mother’s maiden name. 

While MemberPass uses Sovrin, which is based on Hyperledger Indy, the KYC system uses both Sovrin and Hyperledger Fabric. The latter creates an immutable log so regulators can audit that a credit union is compliant.

At present, the MemberPass pilot program has 11 credit union organizations, including the new entrants. UNIFY, TruWest and Desert Financial have already completed their MemberPass pilots, learnings from which were used to update the solution for other users. 

“MemberPass gives credit unions the ability to remain a truly trusted financial partner for members by showing the importance of keeping their identity safe and in their hands,” said Karl Yoneshige, President and CEO of HawaiiUSA Federal Credit Union.

Among its other projects, CULedger is leveraging R3’s Corda blockchain for its CU Pay solution for electronic funds transfer. In 2018, it said it would use the public Hedera Hashgraph network for cross border payments. 

The firm is using a variety of blockchain protocols, stating that it aims to build a network of networks. 

“We want the credit unions to have options so they can ultimately decide whether that platform works for their credit union and its membership. We’re not pushing one particular product. We’re making a menu of products open for them,” Julie Esser, CULedger’s Chief Engagement Officer, told Ledger Insights last year