The Korean Federation of Banks (KFB), a group of South Korean commercial banks, has announced that a new blockchain-based ID initiative dubbed ‘BankSign’ will be implemented in July later this year.
The initiative will replace the massively outdated current system that has been in place for 20 years that has resulted in an enormous number of fraudulent activities, described by local news outlet Korea Joongang Daily as “notorious for its complexity and inconvenience“.
Park Chang-ok, a manager at the department of deposit services and payment systems at KFB described BankSign as giving financial institutions the option to ”choose from in verifying consumer identity, not just the public certification system“.
A spokesperson for KFB explained, ”[It is] the first project co-developed by the local banking sector utilizing blockchain technology. 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 project has been built on the Nexledger blockchain, created by Samsung specifically for businesses. Development began in November 2017, with beta testing following in April 2018.
The current system
The system at present requires a number of identity checks to take place before goods and services can be purchased online in South Korea, with users required to download several security programmes that are only usable on the device they are directly downloaded onto.
While the active software was modern in 1996, there are several reported challenges it now faces. The programmes may slow down computer systems, only working on Internet Explorer for desktop users.
In addition, the outdated technology has led to an estimated 80% of users information compromised in 2014. Research Gate conducted a study the same year that estimated national losses due to these hacks between USD 10 billion and USD 40 billion.
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