Many financial institutions, credit unions in particular, are looking to blockchain to solve many of the problems consumers face day-to-day in financial services. While this technology, also known as distributed ledger technology, has been around for several years, many in our industry are struggling to create practical applications for blockchain in banking and credit union operations.
Solving the security problem
There are a number of use-cases that blockchain can solve for the banking industry, but first and foremost is the nature in which distributed ledger technology – or, the backbone of blockchain – functions. Currently, the financial system is made up of a centralized network, which creates “honey pots” of data. Since the data is stored in one place, all of this sensitive information is both extremely vulnerable and attractive to hackers.