Dutch bank ING claims to have cleared a major hurdle in the use of blockchain technology in financial services: protecting data privacy.
While transparency is seen by many as one of the biggest benefits of blockchain technology, it has proved a headache for banks looking to ensure data privacy.
Currently, information on a public ledger is not private given that changes must be verified by each participant in the network but ING's blockchain team are seeking to address this with their 'zero-knowledge range proof' (ZKRP) code.
The code adds a layer of cryptography to blockchain technology, demonstrating the truth of a specific statement without revealing any additional information beyond what it’s trying to prove. For example, a mortgage applicant can prove that their salary is within a range but does not need to give the exact figure.
"Until recently, one of the primary challenges for applying blockchain in the banking sector was ensuring that data privacy was protected and at the same time meeting regulatory reporting requirements,” says Mariana Gomez de la Villa, global head of ING’s blockchain programme.
Zero-knowledge technology is not new but ING says that the main benefit of ZKRP is that it is ten times more efficient than other options on the Ethereum network, making operating costs much lower.
The bank has now launched ZKPR as an open source solution, letting other developers download, access and contribute to it.