Presented on the main stage at CVC2019 in Zug, Switzerland. Discusses the shifts in how digital identity, particularly CULedger's self-sovereign identity solution MyCUID is being used to return to a normal approach for relationships. Discusses future application in payments as well.

1. Digital Relationships
are Broken
Rebuilding a Cooperative Financial
Relationship Using Decentralized
Identity
Darrell O’Donnell, P.Eng.
Chief Technology Officer
CULedger, LLC
IEEE Member

2. We’ve Done Strange Things In The
Name of SECURITY
• Do you let an organization or person control
you fully in the physical world?
• Let’s Imagine you and I want to talk…
But, we have to do it through someone we don’t
really know…
• We would never do this – but we do digitally.
• And there are consequences…

3. Source:
http://www.informationis
beautiful.net/visualization
s/worlds-biggest-data-
breaches-hacks/
140 MILLION RECORDS
LEAKED IN JULY 2018 ALONE
Annual fraud-related costs:
$3.7 trillion
Global spending on AML processes:
grew > 36% since 2013
Identity theft reaches all time high:
$16.7 million

4. 2 QUESTIONS – to you…
• Given that current systems are error-prone,
not secure, and centralized – what will
happen when we automate things more with
“smart” contracts?
• Where does blockchain help here?

5. Who is CULedger?
Started as a “research to action” project in early 2016
and spun out one of the largest DLT consortiums in the
world
Formed in June 2017 as a credit union service
organization (CUSO) owned by over 40 credit
unions and credit union related organizations
Delivering the premier network of
digital exchange for financial
cooperatives globally

6. OURINVESTORS

7. Credit Unions: The Power for Global
Good
Not For Profit: Profit-minded, but not profit-driven.

8. Current Credit Union Pain Points
Fraud
Increase in fraud across all
channels
o Every $1 of fraud costs $2.92
o 16.7M victims and $16.8B in ID Theft
in 2017
Member friction
Increased member friction in
remote channels
o 40% of consumers are abandoning
applications over authentication
o Consumers have >200 UN & PWs
o It takes 40+ seconds to
authenticate in the call center
Membership growth
CU market share remains
stagnant at 7% since 1992
o CU membership increased 4.4% in
2018
Multiple vendors
Managing multiple vendors and
authentication methods for several
applications
Compliance
Cost of compliance associated with
data security and privacy continues
to increase

9. Current Technology Approach Won’t
Work
• Too much is centralized
Control Points are in the wrong place
We’ve done strange things over decades
• To meet security needs we create barriers
that make no sense anymore

10. Current Digital Access
Your
Credit
Union
Application
Service Provider
You
These Application Service Providers CONTROL access – for
Security reasons (and more).

11. Digital Access vs. Digital Exchange
HOW?

12. You
Siloed & Federated Identity
You

13. From a Siloed Model to Decentralized
Siloed Model
• Independent, centralized
organizations
• Set of credentials foreach
entity to access its
services
• Hierarchy – high
dependence and reliance
on multiple organizations
• Billions “unbanked”
1 • Third party Identity
provider (IDP)
• Single Sign-On(SSO)
credentials to access
the services of the
member companies
of the federation
(Google, FB, etc.)
• Hierarchy – high
dependence and
reliance on middle
organizations
2
Federated Model
• Data collection,
storage and
processing are
decentralized
• Web of Trust
• Self-Sovereign –
Individuals have
full control and
ownership over
their personal
information
• Selective disclosure
3
Decentralized ID

14. MyCUID is the first
KYC-compliant, member-
controlled, interoperable digital
credential — coming from credit
unions worldwide
Private
Safe
Secure

15. MyCUID Aligns with World Economic
Forum Guidance
Diagram source: World Economic Forum “Identity in a Digital World”

16. Identity is a Core Capability – and It
Is Missing from Most Systems…
Identity is core to securing systems
- Knowing who you really are
- Without violating your privacy
- But maintaining compliance
- We’ve failed miserably at this – until now

18. Crypto Valley Conference 2019 –
Smart Contract Security
• Not a lot of “smart contract” talk here.
• It’s code
• CULedger is building a Network of Networks
• Some of those networks are smart contract
driven

19. CULedger’s Network of Digital
Exchange
Secondary FI
Investment Services
Account Services
Credit Union Decentralized
Identity
Fintech Services
Lending Services
Payment Services
Insurance Services
Branch/Remote
Channels
KYC
GOVERNANCE
FRAMEWORK
B-L-T
1:1/Live/Work/Play

20. Smart
Contracts
Loan
Participation
Know Your Customer Know Your Supplier
Lending
Loyalty &
Rewards
Compliance
AML
BSA
P2P Payments
Cross-Border
Payments

21. CUPay
First Credit Union centric, Member-to-Member
payment service
• Using existing Payment Rails
• Blending Organizational Identity (R3 Corda) and
Individual Identity

22. Cross-Border Payments – Current State
Cross-Border Remittances either rely on
complex human-driven ”systems"
✓Proper authorization is expensive and
must be implemented by each institution
independently
✓Current payment rails don’t provide
effective support of AMLKYC protocol
✓Current payment rails don’t hold any funds
or securities, nor do they manage client
accounts.
✓There is no efficient solution to improve
identification of a client

23. CUPay – CULedger Network
SWIFT gpi
CULedger becomes a provider of Member-serving
service – such as Identity-capable cross-border
payments built on top of existing payment rails
✓Flexible management of digital
credentials including their
revocations based on AML, KYC
and other services
✓Transparency of the whole process
and instant verification in real time
✓Verified decentralized settlement
of commercial operations
✓High potential of MyCUID
technology in inter-institution
communication
MyCUID
R3 OrgID
R3 Settler
MyCUID
R3 OrgID
R3 Settler
Other Rails
#CVC19 Question: Why not crypto?

24. Quick Takeaways
• Security requires working digital identity
• MyCUID is CULedger’s first layer of
technology
• CUPay layers MyCUID with R3 Corda (and
Settler) to create new pathways

25. Questions or Comments
• Now or later – see me during the show.
• I can demonstrate the simplicity of MyCUID
as well
• Happy to chat about our partners and why
we chose our stack:
R3 & Luxoft
Sovrin Foundation
Evernym