Identifying and Supporting Financially Vulnerable Consumers in a Privacy-Preserving Manner: A Use Case Using Decentralised Identifiers and Verifiable Credentials

TL;DR

This paper explores how Decentralized Identifiers and Verifiable Credentials can be combined to identify and support financially vulnerable consumers while preserving their privacy.

Contribution

It proposes a novel approach using DIDs and VCs to address privacy concerns in identifying vulnerable financial consumers.

Findings

Potential of DIDs and VCs for privacy-preserving identification

Framework for supporting vulnerable consumers in finance

Highlights challenges and opportunities in implementation

Abstract

Vulnerable individuals have a limited ability to make reasonable financial decisions and choices and, thus, the level of care that is appropriate to be provided to them by financial institutions may be different from that required for other consumers. Therefore, identifying vulnerability is of central importance for the design and effective provision of financial services and products. However, validating the information that customers share and respecting their privacy are both particularly important in finance and this poses a challenge for identifying and caring for vulnerable populations. This position paper examines the potential of the combination of two emerging technologies, Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs), for the identification of vulnerable consumers in finance in an efficient and privacy-preserving manner.