Blockchain could indeed be a potential solution to address both financial information security and privacy concerns, though there are several nuances and challenges to consider. Let’s break it down in the context of your negotiations with banks and lending institutions.

1. Privacy & Security Challenges
Banks and other lending institutions are understandably cautious about sharing sensitive financial data because of:

Compliance with regulations (such as GDPR, CCPA, and other data protection laws)

Fraud risks (sharing data could expose them to hacking or identity theft)

Reputational risks if data is misused or exposed

2. How Blockchain Helps
Blockchain offers key features that can mitigate these concerns:

A. Data Integrity & Security
Immutability: Once data is recorded on a blockchain, it cannot be altered, making it highly secure. This ensures that the financial information you acquire from real estate transactions remains tamper-proof and trustworthy.

Encryption: Blockchain uses cryptographic techniques to secure data. Each piece of information can be encrypted, ensuring that only authorized parties can access it.

B. Privacy
Blockchain has the potential to offer privacy through techniques like:

Zero-Knowledge Proofs (ZKPs): ZKPs allow for the verification of a statement (e.g., that a transaction occurred or that a user has a certain balance) without revealing any specific details about the transaction itself. This could allow banks to prove that real estate transactions are legitimate without revealing sensitive details (like loan amounts or buyer/seller identities).

Permissioned Blockchains: Unlike public blockchains (like Bitcoin), a permissioned blockchain allows only authorized participants to access the information. This can be a controlled environment where banks or lending institutions can selectively share certain data while preserving confidentiality.

C. Transparent Yet Controlled Access
Blockchain can allow transparent transaction verification while ensuring that access to sensitive data is restricted to only those with the appropriate permissions (e.g., lenders, borrowers, auditors, regulators). This provides an audit trail that demonstrates compliance with privacy and security protocols, without exposing the raw details of transactions to unauthorized parties.

3. Challenges and Considerations
While blockchain offers significant advantages, there are challenges and considerations when dealing with financial institutions:

Regulatory Compliance: The financial sector is heavily regulated, and any blockchain-based solution needs to comply with these regulations (e.g., KYC/AML regulations, data retention laws). Different jurisdictions may have varying requirements for how financial data should be handled and stored.

Integration with Existing Systems: Many banks use legacy systems that might not be compatible with blockchain technology. Integrating blockchain into existing infrastructure could be a complex and expensive process, which might slow down adoption.

Scalability: Blockchain networks can sometimes struggle with high transaction volumes (depending on the platform). If you're dealing with a high volume of transactions (as might be the case in real estate), you’ll need a blockchain platform capable of handling that load efficiently.

Data Privacy vs. Transparency: While blockchain provides transparency, achieving a balance between transparency and privacy is crucial. The system must be designed in a way that protects sensitive financial data while still ensuring that the necessary parties can access the information securely.

Adoption Resistance: Financial institutions tend to be conservative about adopting new technologies due to potential risks. There will likely be resistance in transitioning from legacy systems to blockchain-based systems, as it requires not only technical but also organizational change.

4. Possible Blockchain Solutions for Real Estate Financing
You could explore the following types of blockchain applications:

A. Blockchain for Secured Data Sharing
Create a permissioned blockchain where real estate transactions can be recorded. Only parties with the correct access credentials can see or interact with specific pieces of data. For example, a real estate transaction could be recorded, but only authorized lenders can access the financial terms and personal information related to the transaction, all while keeping the transaction’s overall legitimacy transparent.

B. Smart Contracts for Automation
You could use smart contracts on the blockchain to automate parts of the financing process. For instance, loan agreements and terms can be programmed into smart contracts, and execution of these contracts could happen automatically when predefined conditions are met (e.g., a payment made, a title transfer completed).

C. Tokenization of Real Estate Assets
Tokenizing real estate assets (turning properties into digital tokens on the blockchain) can help streamline transaction processing while ensuring that only those who are authorized can hold, trade, or access the financial data tied to the tokens. This would give banks more flexibility in sharing data while retaining control over who accesses it.

Conclusion
Blockchain can certainly help address security and privacy concerns, but its effectiveness will depend on factors such as the choice of blockchain type (public vs. private), data encryption methods, integration with existing infrastructure, and regulatory considerations.

It might be helpful to work with a blockchain consultant who specializes in financial services to design a solution that meets both your needs and those of the banks you're negotiating with. You could potentially start small, such as creating a proof of concept (PoC) for one specific aspect of the real estate transaction process, and then expand based on feedback and results.