Blockchain-Based Self-Sovereign Identity Management System for Financial Institutions

Abstract

The current digital identity systems are centralized and fragmented. In contrast, blockchain technology enables more secure and transparent management of digital identities by providing unified, tamper-proof, and decentralized infrastructure. This new paradigm in digital identity management is prominent as it also places the user in a central position of control over his own personal data, and over who on the internet is able to access his digital identity, what is called Self-Sovereign Identity. By following these guidelines, new blockchain-based self-sovereign identity management systems offer key benefits both to service providers, who make the most of faster and more reliable digital credential authentication processes and to users, who have more control over their own online presence. However, implementations of such systems require full accordance with General Data Protection Regulation (GDPR) and other relevant regulations regarding user privacy and data disclosure. Research addressing the challenge of this new paradigm is being proposed for different areas, and this research proposal focuses on a new approach to digital identity management in the financial area. In particular, the aim is to present a system for user authentication in digital financial platforms such as digital banks, with reduced friction for both individuals and institutions, while securing user privacy.