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Improving personal loan verification through verifiable credentials.

Sparkasse is a collection of commercial public banks in Germany focused on providing financial services for private customers. In total the 431 savings banks have over 15,000 branches and offices and the combined Sparkasse assets amount to about one trillion euros. To encourage innovation in their digital services they issued challenges on the topics of retail banking, business, insurance, investment and real estate at Symbioticon Hackathon 2019. Within the retail banking track teams were challenged to deliver a code or concept solution to improve services that directly involve the private customers of Sparkasse.

Because of the decentralized structure of Sparkasse, where every bank functions independently, Sparkasse experiences a lot of issues with long distance customer identification. There are also a lot of administrative costs involved in receiving and checking all credentials and documents that are needed for personalized service like loan approval.

Switching to a system that uses verifiable credentials removes the need for in person identity verification and minimizes the administrative costs that come with checking credentials.

This proof of concept reinvents the personal loan application process using a custom mobile and web application. Loan applicants can request a loan on the Sparkasse website. Using a QR code scanner and the identity wallet on their mobile phone customers can immediately share credentials with Sparkasse issued by their government (identity information) and employer (financial information). Because the credentials are verifiable through cryptography the approval or declination can be automated based on the information that is shared. This hugely reduces administrative costs and improves the speed and accessibility of the service for end users.

This proof of concept ranked first place on the aspects of innovation and track fit and second place on the aspects of customer benefits and feasibility within the challenge ‘Retail Banking’ at the Symbioticon Hackathon 2019.