Korean Banks to Use Blockchain-Based ID System


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Korean Banks to Use Blockchain-Based ID System

The Korea Federation of Banks (KFB) announced that the local banking industry would launch a new blockchain platform in July. BankSign, as the platform is called, is an ID verification system that leverages the distributed ledger technology (DLT).

BankSign has been developed to help South Korean banks streamline the ID verification process for their users. The launch reflects the industry’s desire to support internet and mobile banking.

Local media cited a KFB representative as saying:

“BankSign is the first project co-developed by the local banking sector utilizing blockchain technology.”

Currently, the majority of local banks use a public certification system that dates back to the late 1990s and is known for its inconvenience. The introduction of biometric authentication sped up the identification process, especially in mobile banking. However, users still need to pass through the traditional system when it comes to online banking from computers. Besides, the traditional system has been mandatory under the Digital Signature Act, but the government pledged to change the law so that more innovative technologies could also be applied instead of the outdated security system.

BankSign is expected to have a transformative effect as it will be used in both internet and mobile banking.

In November 2017, KFB established a consortium to leverage DLT for various use cases. The same month, the group started to work on BankSign, and a few banks tested the new platform this April.

Park Chang-ok of KFB commented:

“With BankSign, banks will have options to choose from in verifying consumer identity, not just the public certification system.”

He revealed that the platform is based on Samsung (KS:005930) SDS’s blockchain service Nexledger, which was launched last year.

Another KFB representative said the new platform might be used beyond the banking sector:

“While BankSign will start off by providing the service in the banking sector, we will work with the government and other public organizations to expand its usage.”

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