According to a patent filed March 15, 2018, the Royal Bank of Canada is planning to venture into the use of Blockchain technology to automate and manage borrowers credit scores. This new system would store historical and predictive information regarding borrowers in order to compute credit ratings.
As an example, if you were to apply for a personal loan, this new blockchain system would be used to automatically determine the terms of the loan you would best qualify for before making a smart contract that would contain the terms of that loan. The system would effectively scan the market for loan offers based on credit data stored in the blockchain, ensuring you receive the absolute best rates for your personal history.
The patent describes:
“In another aspect, there is provided a system for credit and digital identity records with a distributed ledger of a plurality of nodes, each node including at least a computing device. The distributed ledger is having a plurality of blocks, each block comprising identification data linked to a set of identifiers for an individual, transaction data, a timestamp indicating when the block was created, and a hash reference for the distributed ledger.”
This system would also be more transparent for consumers, addressing the lack of trust between the public and credit bureaus, especially after last years Equifax breach that saw the private data of more than 145 million hacked by an unknown source. Blockchain is proving to be a solution to so many cyber concerns that have developed over the last few decades. What’re your thoughts on this new credit history idea from the Canadian Royal Bank? We’d love to hear your feedback.
