ING Group, multinational banking and financial services corporation based in Netherlands is partnering with distributed database company, R3CEV, to jointly invest in blockchain technology. There has been growing concerns about the “zero-knowledge proofs” aspect of blockchain technology from financial institutions and users. Financial institutions involved in capital market operations are always working to increase confidentiality and privacy ion their daily activities.
It is the need for more privacy and security that is pushing financial institutions and banks like ING to adopt blockchain technology. Shared ledgers can be used without compromising the security of the data. ING has built a system which ensure that very little amount of power is used to attain a quick process.
The bank is seeking to apply blockchain technology in several functions including the settlement of transactions. This will be made possible by an improvised and improved version of the zero-knowledge proof, specifically built to maintain privacy and security of its financial operations. The new addition is a wonderful addition to the bank’s system which will allow it to among other things, determine if a customer has the required financial backing to support their application for mortgage without necessarily knowing the actual account balance.
Additionally, the bank is currently working on the idea of “zero-knowledge set membership”. The new concept will offer the zero-knowledge concept that is needed to process data as opposed to solely depending on numbers. This means that in making any financial determination, the bank can use and validate names, location and addresses.
By using the interactive proof protocol or zero-knowledge proof, the customer is able to prove to the bank that they know the particular statement or secret without having to disclose the statement or secret. This is a good technique for financial institutions and big banks like ING who have to struggle to protect huge amounts of data from their clients.
The system has undergone a lot of study and review from academia and peers. ING has already fixed most of the issues that have been highlighted in the zero-knowledge proofs and which could compromise its applicability and credibility. This is one of the positive things that an industry enjoys when it allows other people to review and examine its systems and operations. It allows for early detection and fixation of bugs before they spread to affect the rest of the industry. Several experts have in fact lauded the level of openness which allows the system to be tested and verified as well as the big benefit that comes with it.
