Identifying and Supporting Financially Vulnerable Consumers in a Privacy-Preserving Manner: A Use Case Using Decentralised Identifiers and Verifiable Credentials
This addresses the problem of protecting vulnerable populations in finance, but it is a position paper, so it is incremental and conceptual rather than empirical.
The paper tackles the challenge of identifying financially vulnerable consumers while preserving privacy, proposing the use of Decentralized Identifiers and Verifiable Credentials as a potential solution for efficient and privacy-preserving identification.
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.