Dive Brief:

• TransUnion, the consumer credit agency, announced it made a preferred equity investment in Spring Labs, an advanced cryptography and blockchain-based financial technology company. The amount and stake of the investment was not disclosed.

• Spring Labs is creating a platform — called Spring Protocol — where financial institutions can share information without sharing underlying data. TransUnion aims to leverage that technology in different information markets that it serves, including financial services, telecom and healthcare, said Marko Ivanov, a TransUnion senior vice president.

• Spring Labs appointed Brian Brooks, the former acting head of the Office of the Comptroller of the Currency (OCC), as its first independent director, last month to leverage his "perspective on where the industry is headed," the release stated.

Dive Insight:

The Spring Labs platform can be used by financial institutions to share consumer data with each other while maintaining privacy with respect to who owns the information.

"Institutions can share consumer data in the [data pool or] network, which will be encrypted and can be accessed in real-time," Ivanov said. "Financial institutions that are a part of the consortium can access the encrypted data to verify a consumer's identity through a variety of data points like address, phone number, email identification and others to make the best credit or other financial decisions."

Using a variety of data points, rather than just a credit report, can help institutions make better decisions regarding their customers, Ivanov said.

The Spring Labs platform leverages cryptography to enable users to encrypt information safely and is transparent with the network users. The Marina Del Rey, California based-company's cryptography allows strict control of information visibility, and its blockchain provides a time-stamped record and audit trail. All data points are encrypted before they enter the network, and any member of the network or consortium can access those data points.

Users can add or verify information in the pool by matching it to their own records, which will be time-stamped and recorded for all network users' view.

"This tech can help big financial institutions to verify a person's credentials and history by verifying it with other financial institutions that are a part of the consortium, in real-time," Ivanov said.

The technology has more use cases than just helping financial institutions in making credit and other financial decisions for customers, Ivanov said. Any industry that deals in large swaths of consumer data can benefit from this platform, he said.

Last month, Spring Labs nabbed the former acting head of the OCC, Brain Brooks to expand the platform. Brooks served as an advisor for Spring Labs from 2018 to 2020 until he took the position of acting head of the OCC under President Donald Trump.

TransUnion has evolved from a credit reporting agency into a business operating in adjacent markets, providing data gathering and research services as well, and it plans on continuing to add new services, Ivanov said.

"We plan on working with Spring Labs to develop the tech and help our clients in telecom, healthcare and other services to share information faster while keeping privacy in mind," Ivanov said.

This is not the first investment for TransUnion. In August 2020, it acquired Signal, a real-time data collection platform, to make it easier for companies to structure, organize and leverage consumer data. In October 2020, the Chicago based-company acquired Tru Optik, a data marketplace and data management platform for connected TV, streaming audio and gaming that collects data from nearly 80 million U.S. households.

"From the perspective of TransUnion, we have a corporate development team that looks at the investment of both minority stake investments as well as the acquisition," Ivanov said. "We make investments in organizations either to get access to new data sources or get new data insights, or to get access and have new technologies that can help further our thought process of enabling trust between the consumers and businesses."