TORONTO U.s. consumer credit reporting agencies Equifax and TransUnion say they have joined trials of an experimental Canadian identity network to facilitate sharing of sensitive consumer data over the internet.
The firms told Reuters recently that they are participating in early tests of the network being developed by Toronto-based technology firm SecureKey, Canada's biggest banks and others.
It runs on blockchain, an emerging technology that businesses and investors hope will dramatically improve the efficiency, reliability and security of online transactions.
It's early days for the Canadian project, one of many efforts around the world trying to commercialize blockchain. Investors poured more than $1.4 billion into blockchain startups last year, according to PricewaterhouseCoopers.
The SecureKey network allows consumers to securely verify their identity, then easily authorize sharing of personal data between parties in the network. A consumer could use a mobile software application to authorize a bank or credit agency to share information with a utility to open a new account.
The network maintains a records of transactions, but the confidential data itself is only shared among parties authorized by the consumer, according to SecureKey.
TransUnion and Equifax said they are always assessing new ways to secure consumer credit data, an area that is tightly regulated by governments around the world.
"We are undergoing testing with our strategic partners to ensure our data is absolutely protected," said Anne-Marie Kelly, head of identity management and fraud solutions at TransUnion Canada.
Other participants in the trial include Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank and Desjardins.
Those banks were among investors who provided C$27 million ($20 million) to help fund the project, which SecureKey said should launch by the end of this year.
Blockchain, a technology widely known as the backbone of the digital currency bitcoin, enables the network to perform "triple blind" transactions, said SecureKey Chief Executive Greg Wolfond. Data providers do not know where the information goes and recipients do not know its source, unless the consumer authorizes that the information be disclosed. Intermediaries including SecureKey do not see any data.
A blockchain permanently logs information onto a database that's copied across a computer network controlled by multiple parties, making hacking extremely difficult.
SecureKey will take a small percentage of the fees data providers like the credit companies receive to provide information through the network, Wolfond said.
($1 = 1.3734 Canadian dollars)
(Reporting by Solarina Ho; Editing by Jim Finkle)