South Korean banks seem to be ready to embrace blockchain technology to improve their services and processes. This time, the intention is to verify their customer’s identities using a blockchain identity verification system that will be developed by the Korea Federation Banks (KFB) and will be applied since July 2018.
Banks are showing their interest in embracing a technology that is being used all over the world by several enterprises. One of the most important sectors that are going to suffer from the rapid growth of virtual currencies and blockchain solutions is the banking industry. There are different ways to improve services and be competitive, and banks are investing in distributed ledger technology to improve their services and products offered to their clients.
Because of the ‘Digital Signature Act’ policy that applies in South Korea, banks in the Asian country had to use a 20-year-old ineffective public banking security system that is now trying to be replaced for more modern platforms. This is why the government decided to reverse this policy and change the landscape. As reported by the local news source JoongAng Daily, the new system is known as BankSign and can be used in computers or mobile phones. Indeed, it may help banks offering a new ID verification system to their clients.
A spokesperson from KFB commented about this implementation:
“BankSign is the first project co-developed by the local banking sector utilizing blockchain technology.”
The BankSign has been built on top of Nexledger, an important enterprise that has been made by Samsung’s Enterprise Solution (SDS) division. The solution uses a biometric authentication system that helps customers gain access to different services using a single ID authentication. In the past, Nexledger has been used and applied to other companies and financial platforms. For example, Samsung used it in late 2016 with the Samsung Card.
The KFB has been established back in 1984 and the entity represents commercial banks in South Korea. The institution includes important financial institutions in the Asian market like Shinhan and Woori. BankSign will be working with different institutions, including governments, other financial entities and public organizations.
The FKB spokesperson explained:
“While BankSign will start off by providing the service in the banking sector, we will work with the government and other public organization to expand its usage.”
South Korea has been working very hard in order to regulate the crypto market. The Asian country was one of the most active in cryptocurrency trading activities, but the government decided that it was not possible to leave it without regulations. Banks that work with crypto-related firms need to present important information about their clients, and cryptocurrency exchanges need to comply with strict Know Your Customer (KYC) and Anti Money Laundering (AML) policies.
Another important decision taken by the South Korean authorities was to totally ban Initial Coin Offerings (ICOs) from spreading in the country. Because of this some companies that were thinking about issuing their own tokens decided to leave the country in order to search for better regulatory environments.