Blockchain for Banking News

TransUnion invests in blockchain credit data startup Spring Labs

credit score

Today consumer credit reporting agency TransUnion (market cap $19 billion) invested an undisclosed sum in Spring Labs, which has its blockchain-based Spring Protocol. Spring Labs’ stated aim is for more financial data to be shared in a privacy preserving manner. That way it’s easier to detect fraud and a better consumer profile can be created.

For example, it wants additional firms to contribute credit reporting data such as telecoms companies, insurers, and utilities, which could help the unbanked receive credit. Its permissioned blockchain creates an immutable and time-stamped record of data.

“Spring Labs built a state-of-the-art technology protocol that cryptographically transforms and anonymizes data to unlock new data and products,” said Steve Chaouki, President of U.S. Markets at TransUnion, who is joining the Spring Labs Board of Directors. The companies will also be working together.

“The ability to securely exchange information without revealing the underlying data and identity of network participants creates opportunities for our customers and the consumers they serve through sharing of historically siloed data.”

One of the startup’s highest profile successes has been for the Property Assessed Clean Energy (PACE) loans industry. It enables homeowners to finance solar installations through their property tax bills. However, the loan is paid out to contractors who often fraudulently submit funding requests to multiple lenders. Using the Spring Labs solution, the lenders share data anonymously, preventing double financing.

When Spring Labs announced its seed funding in early 2018, former TransUnion CEO Bobby Mehta was an advisor, alongside Brian Brooks who was then EVP at Fannie Mae. Brooks went on to become the Comptroller of the Currency and joined Spring Labs’ board last month.

Prior to today’s announcement, Spring Labs had raised $38 million from other backers, including GM Ventures and August Capital.

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