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IBS Professor develops app to protect personal data from banks

Erich Schumann, a professor at the Brandeis International Business School (IBS), alongside a team of students, recently developed a mobile app to better protect individuals and their private data, according to a press release from IBS. Banks across the country and throughout the world collect personal data on their clients, and this app is designed to increase personal information security, specifically through the implementation of blockchain technology.

 

Jonathan Skidmore MBA ’22, a student who helped to develop the app said in the press release that “There is a low level of trust in general, especially when it comes to data protection.” Schumann and his team believe that blockchain technology has the ability to provide Americans the security they desire while having a bank account. This would allow Americans to feel protected while they build credit, increase savings and better protect their income. 

 

Fincludio, as the app is called, allows users to pick and choose the services they desire from the banks they are willing to work with. As described in the press release, the personal information is stored securely in a digital wallet on the user’s smartphone. Once the user determines the services and bank they would like to work with, the bank is then only provided the information that it is required to collect by law to verify the identity of their new customer. This gives users the peace of mind that they know exactly what information the bank has received and what they have kept secure and private on their own devices.

 

The app is built on blockchain technology. As defined by IBM, blockchain technology is “… a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” The assets in question here can best be described as anything of value to an individual. They can range from real world objects such as homes and land to intellectual objects such as copyrights, patents and digital creations. The crux of these objects however, as Solulab (a technological consulting firm) describes it, is that they must be an “immutable ledger.”

 

For an object to be considered an “immutable ledger” and properly integrated into blockchain technology it must be highly unchanging and unaltered. As expressed by Solulab, the importance of the unchanging nature of these objects and information is that the data is reliable and unable to be changed in bad faith. The central idea behind the blockchain ledger is that the data is under tight security and has not been changed or altered.

 

Banks, to verify the identity of their clients, collect highly personal and unchanging data about them as is in accordance with state and federal laws in the United States, as explained by the IBS press release. Personal information about clients, such as race, gender identity, birthdays and social security numbers, are all collected by banks. This, in turn, instills a level of discomfort and skepticism among Americans who do not wish to have their private information being shared with major corporations.

 

As discovered by the Federal Deposit Insurance Corporation (FDIC) in their 2019 survey on Household Use of Banking and Financial Services, 5.4% of U.S. households were “unbanked,” meaning that no one in the household had access to a checking or savings account at a bank. The report also showed that while 5.4% of households were unbanked, this was the lowest rate of unbanked Americans since the survey began in 2009. However, as shown in the Brandeis press release, the families who are most likely to be unbanked due to a lack of trust in financial systems are Black and Hispanic.

Fincludio aims to reduce that racial disparity by increasing the level of security any individual has over their own data and information. Schumann explained this in the press release by saying, “You have your information. We put that in a wallet and it is secured by blockchain technology. And you decide to whom you want to give access to your wallet.”

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