CULedger: The Premium Platform of Digital Exchange

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Julie J. Esser, Chief Experience Officer

The fourth industrial revolution is an underlined theme in all the industry conversations today as the technological developments are on the verge of changing human lives, businesses, markets, and overall global economy. Amongst the various trends in the industry, the one getting the most traction is blockchain and its underlying distributed ledger technology (DLT) that are transforming businesses. To maintain relevancy with the continually developing digital age, today, credit unions are leveraging blockchain to streamline and simplify several processes including identity authentication, transactions across borders, and record auditing. Spearheading the digital transformation is CULedger.

In an interview with CIO Applications, Julie J. Esser, a credit union industry veteran and the Chief Experience Officer at CULedger shares her insights on CULedger’s value proposition and its platform for digital exchange.

Tell us about the inception of the company.

CULedger began its quest in early 2016 with a research-to-action project as an endeavor between CUNA (Credit Union National Association), Mountain West Credit Union Association, and Best Innovation Group. The notion behind the whole research initiative started after realizing the benefits of blockchain for the financial services marketplace. At that time, we had 70 credit union-related organizations that contributed $650,000 in research and development contribution to support the development of a use case around the use of digital identity credential in a call center environment.

Being a credit union-owned CUSO (credit union service organization), our focus is on delivering innovative applications on a globally distributed ledger (DLT), or blockchain, platform for credit unions. It helps credit unions serve the digital needs of its members in working with an international consortium of credit unions and trusted industry providers. We are owned by 40 credit unions and credit union-related organizations. We have 27 credit unions that are direct owners, and they control the entity.

CULedger empowers credit unions to implement the technology and utilize the current and future applications that run on it. Our mission is to deliver the premier network of digital exchange for financial cooperatives globally. The ability to leverage and collaborate with over 89,000 credit unions across the world, which represent more than 260 million members worldwide, is a considerable undertaking. This technology provides us an opportunity to make an immense difference in the lives of members and employees alike.

What are the challenges faced by the customers in the financial industry and how does CULedger address them?

One of the major challenges faced by credit unions is the continuous increase in the cost of compliance associated with data security and privacy.

Our vision is to deliver a premier network of one-to-one and peer to peer digital exchange for financial cooperatives globally

We represent 5,000 credit unions and 110,000,000 members in the U.S, and as we see more things evolving around data security, regulatory changes and standards seem to continue to increase. Another big issue that we are trying to solve is reducing or eliminating fraud across all channels, especially while dealing with remote channels, such as call centers and online. Amidst the addition of more remote and digital channels, we aim to maintain the same level of trust between credit unions and their members as walking into a branch.

The third problem we are trying to solve is the user experience. According to statistics, 40 percent of consumers are abandoning applications because of authentication processes. Instead of having the members remember their username and passwords like in internet or mobile banking, we are utilizing authentication to develop a seamless experience across all channels, regardless of the program, creating a better user experience.

What are the key offerings of CULedger?

Our vision is to deliver a premier network of one-to-one and peer to peer digital exchange for financial cooperatives globally. Our first phase of offering is in the area of digital credentials. We partnered with Evernym—the company that created the Sovrin Foundation, an attribute-based open-source global identity network for self-sovereign identity (SSI) – to launch MyCUID. As a consumer-focused global digital identity, MyCUID enables credit union members to protect themselves from financial fraud and identity theft while enriching the trusted relationships they have with their credit union. MyCUID allows the members to own and control their personal identifiable information, and it can never be taken away. We started with identity because verifying identity is the first step in every interaction that a credit union has with its members.

The second phase is focused on trusted digital data, which involves implementing the use of smart contracts to improve efficiency in lending processes and on-boarding new members. Smart contracts help streamline the eligibility requirement aspect, such as credit scoring, loan participation, and anything relating to contractual relationship or agreement. Our third pillar is connected to digital value or simply virtual currency, in which credit unions provide loyalty and reward points for transactions, cross border payments and settlement. We provide services for all service interaction types, whether it’s B2B, B2C, or C2C.

What differentiates CULedger from similar organizations and keeps you ahead of the competition?

We are not a product company, but an enabler of this new technology. The voice of the customer, whether that is a credit union or its members, is an essential aspect of our deployment. Combined with the collaborative nature of the credit unions, we are very far ahead of our financial counterparts. Our network is going to enable all things possible relating to digital exchange as we are leveraging the entire global credit union industry. CULedger believes that providing SSI is foundational for credit unions and their members worldwide, addressing the problem of having siloed online identities.

How do you envision the future for the organization?

Our offerings have been getting a lot of interest in countries like Poland, Canada, Australia, South Eastern Asia, and Ireland. Since MyCUID is the first global digital identity ecosystem for credit unions and their members, it is truly the foundation of the entire CULedger platform. All future applications, including shared KYC, cross-border payments and loan participation, will leverage MyCUID as we continue to build upon our private, permissioned distributed ledger network. As CULedger moves out of the pilot phase and into full deployment, we are excited to see how credit unions leveraging this new technology will shape the future of financial services.