Blockchain certification pilot project will start on the 27th by Korea Federation of Banks (KFB) and 6 South Korean banks. After performing a final inspection on security requirements and certification, they are going officially start blockchain certification business in July.
According to financial industries, KFB and KB Bank, Shinhan Bank, IBK (Industrial Bank of Korea) Bank, KEB Hana Bank, BNK Busan Bank, and Jeon Buk Bank are planning to start blockchain certification pilot project together. Previously, KFB selected Samsung SDS as a preferred bidder and it has been preparing blockchain certification business that replace official certificates. It invested about $7.42 million (8 billion KRW) for this project.
KFB held a final demonstration of blockchain certification system on the 25th and it is going to perform a pilot project for its employees until July. This blockchain certification project combines blockchain technology and certification technology and it allows banks to share PKI (Public Key Infrastructure) information without centers. Each bank will be able to process certification tasks independently as a result. Performance of banks’ certification systems will be improved drastically depending on number of servers that they install.
Previous official certificates needed large-scale systems that can perform certification tasks. As a result, every task came to a halt when services could not be provided due to issues with central systems. Blockchain allows every bank to perform their own tasks independently from other banks.
KFB and 6 South Korean banks are going to enhance a system so that certificates that are registered into blockchain network can be co-used by all banks and eliminate inconvenient registration process while they are carrying out this pilot project. Personal authentication can be easily done through fingerprint, pin number, and pattern. Although only 6 banks are participating in this project, all 18 South Korean banks will participate in official business and work on replacing official certificates.
While South Korean Government declared official certificates to be thrown out, South Korean banks are also pushing for certification tasks on their own through this pilot project and this will open up ways for customers to use simple certification process based on blockchain technology.
When certification business based on blockchain is commercialized, it is expected that certification system based on official certification will change dramatically. It is heard that KFB supposed 100 virtual banks within banks and performed BMT (Benchmark Test) for safety of systems.
It is heard that Samsung SDS’s platform called Nexledger technology was applied to this blockchain system. “Before we start our official business in July, we are going to inspect every process of blockchain certification system and carry out a final test at the same time.” said a representative for KFB.
KFB is also looking into applying blockchain technology to payment settlements and overseas remittance and received separate consulting on digital financial model. Its plan is to apply blockchain to various businesses in the future. It is expected that there will be more ties between financial investments, insurance, and blockchain systems of credit card companies as South Korean banks start their pilot project on certification platform.
About 15% of entire IT costs can be reduced when a blockchain platform for a financial service is applied. Consistent and open platforms can be created rather than complicated and closed platforms. “When blockchain certification goes on full-scale, financial transaction authentication and verification processes will be reduced drastically and time that is spent on settlements and payments will be reduced greatly as well.” said a representative for a bank. “Besides replacing official certificates, we are also looking in to developing personalized products and establishing automated business handling systems through Smart Contract.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com