According to Coinbase, which cited the patent that was submitted last June, Capital One is aiming to create a blockchain-based system that receives, stores and retrieves encrypted user authentication data. The filing on the patent application was released late last week. According to Coinbase, the company’s patent application describes the effort as a “distributed, non-reputable record of authentication interactions” that lets users authenticate themselves across different platforms — but the amount of personal information shared is limited.
The system would authenticate or reject the user based on the data, which is kept securely on the blockchain. Capital One said the platform would reduce the time and resource burdens for institutions when bringing on new clients and would please users that “resent” having to authenticate themselves as they move between different financial firms. According to the report, Capital One said financial firms “may, therefore, benefit from a collaborative authentication system that handles authentication interactions for multiple institutions.”
News of the patent application comes at a time when Capital One reported a robust second-quarter performance as the bank had increased spending and lowered losses in its credit card business. Chairman and CEO Richard Fairbank said the company showed strong year-over-year growth in pretax income, driven by revenue growth and significant improvements in provision for credit loss.
“Capital One delivered another quarter of strong financial performance as we continued to invest to grow and drive our digital transformation,” Fairbank said in a statement. “We saw credit improvement across our businesses, and growth math is now helping overall domestic credit card trends.”
Capital One has been closely watched in recent weeks, as Walmart has reportedly been in talks with the bank to take over as the issuer of its store-branded cards, which would end a nearly 20-year run by Synchrony Financial. Fairbank was asked during the quarterly conference call to outline what the company looks for in a card partner and, without getting into any specifics about Walmart or anyone else, he said the bank looks for a “strong partner with strong brands and a cultural alignment and a commitment to the card program.”