Canada’s Royal Bank Considers Blockchain For Credit Cards Automatization
The bank outlines a platform built on a blockchain that would automatically generate credit ratings using a borrower’s historical and predictive data, the patent of it was released on Thursday. The application presents a system to utilize more data sources than existing credit rating systems, which would improve loan process.
The RBC patent application indicates that it would redesign the credit rating system to provide more transparency for users to understand how their scores are calculated. This new level of transparency would support users to improve their sources more effective.
One way the system could work is by using marketplace information to analyze loan offers based on existing credit histories.
The application explains, that 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, and the distributed ledger 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.
The system would automatically determine what sort of loan and creditor would be appropriate before generating a unique smart contract that contains the terms of the loan, in case if the loan application is submitted.
According to the filing, the blockchain-based system would automate every step of the credit rating process through a more transparent system.
It is still uncertain if the system would use one single blockchain or more. Also it’s unclear whether RBC would be ready to build the system if the patent is granted.