In November 2017, ING's blockchain team announced its first major breakthrough, which it believed could encourage the use of blockchain technology in financial systems and services. The new code, a "zero-knowledge range proof" (ZKRP), was aimed at protecting clients' data as it is being stored and transacted on a blockchain network.
As a blockchain is a shared ledger, its use within banking risks the exposure of client data to the participating nodes, or computers, that are verifying and encrypting transactions on the network. Distributed ledgers and/or blockchains, by definition, store and distribute data across the entire network.
ZKRPs can demonstrate the truth of a numeric statement without revealing the exact number. ING gave this example in its 2017 announcement: "A mortgage applicant could prove that their salary sits within a certain range, without revealing the exact figure. Similarly, the ZKRP could prove that a payment amount is within a limit, without showing the exact amount."
Zero-knowledge proofs, a method of encryption whereby a hidden value can be proven without revealing its value, were conceived decades ago and first widely used in blockchain in the Byzantium fork of Ethereum in September 2017. By contrast, zero-knowledge range proofs, as with the mortgage example, can prove the value sits within a range, but not the actual value. They use similar open-source coding to that found in Ethereum's stack to encrypt a value within a range.
Mariana Gomez de la Villa, global head of ING's blockchain program, said in 2017 that ZKRP helps banks to protect data and meet regulatory requirements, adding: "While existing zero-knowledge technology has provided us with a way of overcoming that, the main limiting factor is the resource, and therefore cost, that each verification would generate."
The latest breakthrough, announced October 21, 2018, is zero-knowledge set membership (ZKSM), which allows the encryption of not just numerical data, but also contextual data, such as locations and names.
The development looks set to be implemented via ING's wholesale banking services. These banks will now be able to validate that a new client lives in a country belong to the European Union or prove a postcode, for example, without revealing the actual country or code. ZKSM will also reportedly apply to identity management and anti-money laundering systems and data validation.
Both ZKSM and ZKRP are open source and published on ING's Github repository for other developers to learn from and utilise in their own programming. Github users can also contribute to ING's own solution.
ING has an active blockchain development team. In January, it partnered with other major banks and shipping firms to complete the first blockchain-based agricultural trade. In March, ING and Credit Suisse completed a securities lending trade using blockchain technology. ING also became part of a banking and trade collaboration in September 2018, which plans to track and improve commodities transactions using blockchain technology titled Komgo SA.