Visa R&D Working on Blockchain Solution for Financial Data Aggregators

A recent paper published by the R&D team of Visa, the world’s leading provider of card payment services, describes a new system based on blockchain that aims to change the way banking institutions transfer the transactional data of their customers to personal finance apps such as Mint and Credit Karma.

They call it LucidiTEE and the platform is meant to provide blockchain-based tools for sharing sensitive personal data in a secure environment. The name is a play of words, combining ‘lucidity’ and TEE (Trusted Execution Environment) and is meant to emphasize the need of introducing policies to prevent the widespread misuse of personal data, which has been plaguing the virtual world as of late.

This includes features like feeding the data into machine learning algorithms, which will be looking for fraudulent behavior and preventing the aggregation of anonymized customer data, which financial apps are known to be selling to large third-party corporations such as Google.

The paper is available online on the Cryptology Eprint Archive website and boasts LucidiTEE as “the first system to enable multiple parties to jointly compute on large-scale private data, while guaranteeing policy-compliance even when the input providers are offline, and fairness to all output recipients.”

Last month Visa announced that they will follow PayPal in quitting the Libra Association, shortly before the launch of the project is set to commence.

The company is also known for its interest in developing a blockchain-based B2B payment service, initially developed in collaboration with the blockchain startup Chain. The goal is to provide a remedy for the slow banking networks, which at the moment hamper international money transfers.

The research performed by the Visa R&D team is available to be used by everyone involved in the security and cryptography community. The system was already included in Tendermint and Hyperledger Fabric.

Future releases such as Algorand and Ethereum 2.0 may also benefit from it. Currently, the paper is being reviewed and could be subject to alterations, but the general statement of it is to introduce more control in the hands of customers, protecting private data from being passed around between different entities.

Standardizing the procedures for obtaining and processing the data from personal financial transactions has been a center of attention for both fintech companies and banks.

Data aggregators are becoming more and more influential in the banking system. The most notable company in the field at the moment is probably Plaid.

Based in San Francisco and with valuation close to $2.56 billion, it runs multiple financial apps and also the cryptocurrency exchanges Gemini and Coinbase.

The current data aggregation methods have considerable advantages, compared to previous practices, where customers had to provide their login credentials to allow the apps to gather their transaction data.

Early in the history of data aggregators, banks were hesitant to share information with them. In 2010 the Dodd-Frank Act made storing customer records in electronic format mandatory and eased up the process of data collection.