Credit union professionals are getting a crash course in distributed ledger technologies thanks to a series of immersive three-day classes emphasizing innovations, services and features.
The classes are being offered by Best Innovation Group, and began last month at CU Direct's Innovation Lab in Irvine, Calif., with a second round set to kick off in Tampa on Feb. 14.
“The training is important in order to gain familiarity and confidence with the technology to be able to see the value to our members and business before we make any investment,” said Kevin Chandos, software architect for Olympia, Wash-based Washington State Employees Credit Union and an attendee at the first session.
“I knew the general concepts around distributed ledger, but the class has demonstrated how the technology can be used for far more than just digital currencies,” he said. “Identity is a very promising area that I find of great interest.”
According to Best Innovation Group CEO John Best, the course is designed to help organizations become less resistant to digital disruption by providing custom training and hands-on experience with the latest distributed ledger technology specifically crafted for the CU industry.
“This course is designed for credit unions,” said Best, who also serves as one of the instructors. “We are offering use cases for credit unions. There is nothing like this out there.”
Students were offered a better understanding of the semantic web, smart contracts, self-sovereign identity and the evolving Credit Union Financial Exchange.
“Blockchain and distributed ledger technology are exciting innovations that may play a role in credit unions’ ability to gain an edge in an increasingly competitive environment. It’s about so much more than crypto-currency,” said Brian Hamilton, VP of innovation at CU Direct. “The cases being explored for credit unions include real-world benefits, such as improved efficiencies, security, integrity and an enhanced member experience. Best Innovation Group and CULedger are on the forefront of development in this area.”
During the first day of the January classes, attendees were introduced to distributed ledger technologies and then CULedger-specific distributed ledger technologies. Formerly known as CUBlockchain, CULedger is a credit union consortium supported by the Credit Union National Association and the Mountain West Credit Union.
Last year the National Association of Federally-Insured Credit Unions also became the first U.S. financial services trade association to join Hyperledger, one of the world’s largest blockchain associations.
During the January sessions, students were also taught about self-sovereign technology, the semantic web, hash graphs and “smart” contracts, noted Best. The second day focused on hands-on lab work developing and testing these technologies.
“We build out a small version of the platform in the class to see how every little piece of it works,” said Best. “They [students] will develop a smart contract and build a platform that transfer information back and forth.”
Calvin Park, CU Direct’s director of software engineering, also attended the course. He is intrigued by “secured trusted identity with high availability and traceability and data exchanges” that could have future an impact in the credit union space.
“I had the basic concepts on distributed ledger. After the training, I have gained a lot of knowledge on the concepts and directions,” said Park. “The class gave me greater insight and sparked ideas into the exploration of how it can be used in various ways from exchanging data between organizations to securing identities.”
For WSCEU’s Chandos, one of his major takeaways was adopting a “mental shift” when approaching the concept and applications of distributed ledger. The CU’s banking core, he explained, is currently the “system of record” for financial transactions.
“The ledger would be the system of record for events that occur. So if I have a money transfer recorded in the ledger, but my core says no-go for any reason, the system will have to issue a reversal to the ledger,” said Chandos. “At that point I’ll have recorded both the attempt and failure of the transaction in the ledger, while the core simply sees a denied transaction. It’s definitely a shift in thinking, but also opens up other ideas.”