How many times have you answered, “What’s your mother’s maiden name?” or named your first pet when setting up a new account? Today, those common knowledge-based authentication questions have become the most vulnerable forms of customer identification as financial institutions are being increasingly hit by fraudsters in the call center.
CULedger, a credit union service organization (CUSO) that began when a group of credit unions came together in 2016 as a direct response to the increasing threat of fraud, took up the challenge of improving the member identity authentication process across all delivery channels. CULedger was formed specifically to bring a decentralized identity solution product for credit unions to market. Hence MemberPass™—a digital identity credential held by credit union members that protects credit unions and their members from identity theft and fraud in all financial interactions, from call center authentication to lending to opening new accounts—was born.
CULedger worked with decentralized identity organization, Evernym, to build MemberPass™ (formerly called MyCUID) with Hyperledger Indy—a distributed ledger software project that is interoperable with other blockchains or can be used on its own to power the decentralization of identity. With Hyperledger Indy at its core, MemberPass™ serves as a permanent and portable digital identity that reduces member friction and injects more trust in digital interactions within credit unions.
During a pilot program with three credit unions in 2019, initial results for MemberPass™ were promising. Whereas authentication in the call center could take anywhere from 90 to 120 seconds—or sometimes even up to five minutes depending on the transaction—MemberPass™ reduced that process down to 15 seconds or less.
There are now thousands of MemberPass™ credentials in live production, with the expectation that number will grow year after year as the focus shifts to scaling and evolving the network. Credit unions recognized the advantages of MemberPass™ from the get-go and are looking to get more of their members using the digital identity credential. One participating credit union is working with CULedger on a strategy for issuing new MemberPass™ accounts inside its branch locations as part of their new member onboarding process. Other credit unions have expressed interest in implementing MemberPass™ in its Internet banking channel and its mobile banking channel. More use cases are being defined as more credit unions begin to understand the power of this privacy-enhancing technology.
Hyperledger teamed up with CULedger to capture the details behind the launch of MemberPass™ as well as steps that are underway to grow adoption and interoperability. Find out more in the full case study.