Canadian lender to use new technology to help automate credit scores
The Royal Bank of Canada has released a patent application for the development of a platform on a blockchain that will generate credit ratings automatically; utilizing predictive and historical data of the borrower. According to the application released Thursday, the patent will improve their credit rating system utilizing more data sources than the current rating systems. The result will be more efficient loan processes and record keeping.
The patent application also states that a more transparent credit rating system will help consumers better understand how the entire system works. And, the increased transparency will help individuals improve their scores faster than is currently available. This is clearly good news for a crypto currency market beleaguered by a recently falling market cap brought on by news earlier this week of Google’s decision to ban cryptocurrency related advertisements starting in June.
RBC’s blockchain powered system will make a thorough analysis of loan offers based on a user’s existing credit history. This will be done using marketplace information. As per the patent application:
“There is provision for digital identity and credit records on the system using a distributed ledger. It also has a distributed ledger with many nodes, each one with an identification data that is linked to different identifiers for each transaction data, a hash reference and a timestamp that will indicate when each block was created”.
Subsequently, when an individual submits a loan application, the blockchain-based system will determine the type of loan automatically. The system will also determine what creditor is right for issuing the loan, will then generate a smart contract with the terms and conditions of the loan and will automate every stage of an individual’s credit rating process using blockchain technology – a more transparent and accurate system according to the filing.
However, it is not yet clear if the system will use multiple networks or a single blockchain.