Today South Korea’s Shinhan Bank announced it has started to deploy a blockchain-based decentralized identity (DID) solution. Initially, the identity will be used to change the login method for online banking, but there are plans to use it for know your customer and more.
Clients can submit personal information using Shinhan’s mobile banking application, SOL, and the data is encrypted and saved on the phone. The process takes a photo of the person in real-time and accessing the data requires a fingerprint scan. After Shinhan has authenticated the information, the data can be reused by the individual. Personal data is not stored on the blockchain, which is used for the authentication process.
In the near future, there are plans to use the ID for password changes and know your customer (KYC) verification. If one bank has verified the information, then the data can be sent to another bank or insurer, and the recipient only needs to verify the identity’s authentication using blockchain. This means customers don’t have to do cumbersome identification processes with multiple organizations.
“Decentralized identification will be the starting point for the digital ID ecosystem that will grow in the future, and it will be able to develop into a platform for managing and transacting data as well as personal identity information,” said Hyeon-ki Jang, Head of the R&D center at Shinhan Bank.
Shinhan is one of the backers of the MyID Alliance, which was initiated by startup ICONLOOP. Last year the regulator, the Financial Services Commission (FSC), added the MyID service to its sandbox. The alliance now has 77 members, including Samsung Finance.
ICONLOOP, which developed its LOOPCHAIN blockchain, has raised more than $13 million in financing.
Other companies within the Shinhan group are exploring adopting the MyID service within the year, including Shinhan Card and Shinhan Investment. That said, Shinhan is a member of multiple DID groups in Korea. It is part of the Initial DID alliance founded by the three big telecoms firms which now has more than a million users. And it was also a co-founder of the DID Alliance.