The Korean Federation of Banks (KFB) has announced that it will soon release a blockchain-based identity system for usage in retail domestic banks. It will be called BankSign and will be launched in July, after the end of the test period, which had begun in April this year, as reported by CoinDesk.
BankSign will offer local banks the option to replace the existing ID verification system that has been in place for decades in South Korea.
Until this year, Korean banks were forced to use a 20-year old public banking security system that is predictably inefficient and outdated. However, the government reversed its ‘Digital Signature Act’ policy, wherein domestic institutions were mandated to use the public certification system.
The blockchain platform is built on top of Nexledger, a private enterprise cloud computing platform developed by Samsung SDS – the IT subsidiary of South Korea’s biggest conglomerate, Samsung.
According to the Korea JoongAng Daily in November 2017, KFB, in conjunction with local financial institutions, formed a banking blockchain consortium, after which investigations began to create an alternative authentication system.
The new blockchain system, which, according to KFB, will be available for online and mobile banks, is one of the first blockchain initiatives from South Korean commercial banks which are aimed at interacting with the mass consumer.
With BankSign, banks will have options to choose from in verifying consumer identity, not just the public certification system,
– Said Park Chang-ok, a manager at the department of deposit services and payment systems at KFB.
Samsung SDS was launched in April 2017 alongside the launch of Nexsign, a biometric authentication solution also developed by Samsung, that enables customers to gain access to a multitude of services using single ID authentication. BankSign marks the second time that Nexledger has been applied to the financial sector. Previously, Samsung SDS provided the platform to Samsung Card in late 2016, a spokesperson from the tech company explained.
KFB said that BankSign will find other applications within government and other public organizations after taking off in the banking sector, with an official launch that is only weeks away. A KFB spokesperson explained:
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.
The KFB Federation was founded in 1984 and represents the interests of commercial banks in South Korea, including notable financial giants like Shinhan and Woori – they, in particular, are exploring the possibility of using blockchain for cross-border money transfers.
Unlike a public blockchain system, private blockchain systems require permission or an invitation, often by the network starter, to gain access to the ecosystem.
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