South Korean banks are going to introduce a new system based on distributed ledger technology (DLT), also known as ‘blockchain,’ in a bid to enhance the user verification process in online and mobile banking, Korea Joongang Daily reported.
The Korea Federation of Banks (KFB) said that the blockchain-based identity verification solution – BankSign – would be officially rolled out next month. The platform is based on Nexledger, a private blockchain solution developed by Samsung SDS.
In November 2017, the federation formed a consortium with its member banks with the objective of exploring ways in which blockchain technology could be applied to the domestic banking sector and started working on BankSign. The consortium began beta testing of the solution in April with employees of selected banks.
“BankSign is the first project co-developed by the local banking sector utilizing blockchain technology,” a spokesperson from the federation said.
In the existing setup, most Korean banks rely on “public certification system” for user identification, which is a highly cumbersome process. BankSign, which can be used in both computer-based online banking and mobile banking, will significantly simplify the process.
“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.
The federation plans to expand the platform to the government and other public organizations as well.
