Yes, blockchain can offer a secure and privacy-preserving solution but only when implemented with the right architecture and governance model.

Blockchain’s core value lies in its ability to create tamper-proof, transparent, and auditable records, making it ideal for sharing financial data without compromising integrity. However, concerns from banks and lenders around data exposure, regulatory compliance, and customer confidentiality are valid especially when raw financial data is made public.
Here’s how blockchain could solve this issue:
1. Use of Permissioned Blockchains
Instead of public blockchains (like Ethereum), permissioned blockchains (e.g., Hyperledger Fabric, Quorum) allow only authorized parties (banks, underwriters, regulators) to read/write data. This maintains control over access and satisfies compliance frameworks like GDPR or HIPAA.
2. Zero-Knowledge Proofs & Encryption
Advanced cryptographic methods like zero-knowledge proofs (ZKPs) let institutions prove something is true (e.g., a borrower meets creditworthiness criteria) without revealing the underlying data. This preserves privacy while enabling trust.
3. Smart Contracts with Conditional Disclosure
Smart contracts can automate data-sharing only when predefined conditions are met for example, releasing financing history after a verified NDA is signed, or when a threshold is crossed (e.g. 80% LTV approved).
4. Immutable Audit Trails
Blockchain offers immutable logs of who accessed what data and when—something most traditional databases cannot guarantee. This increases confidence among institutions sharing sensitive real estate or financing data.

In summary, blockchain can indeed solve the privacy and security concerns slowing down financial data sharing but it must be private, permissioned, encrypted, and purpose-built for compliance. If structured correctly, it can unlock a new era of secure, collaborative financial infrastructure.