Local banks embrace blockchain technology – Korea Times

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Gettyimagesbank


By Anna J. Park

It’s fair to say the retail banking sector, at least, is already in a “red ocean” because it’s been losing trust with its customers rapidly. Amid an era of convergence, as barriers are blurring between technology and traditional banking systems, Korea’s leading banks are on track to possibly disrupt their conventional way of functioning thanks the emergence of blockchain technology.

The technology promises much for the retail, corporate and banking sectors. But it has to satisfy several outstanding conditions before becoming a core mainstream technology in banking. A key point is that with the finance sector digitization accelerated with the pandemic-led social distancing measures, local Korean banks are seeking to use blockchain technology more both in retail and corporate banking.

Based on the blockchain’s decentralized ledger technology, banks aim to apply the technology in various ways, such as increasing the safety level of their banking apps and streamlining complicated processes for identification certification. Critics say that most retail businesses haven’t taken up use of blockchain technology. As for the banking industry, strict regulatory requirements create high entry barriers for the technology.

Shinhan Bank has recently applied a decentralized identifier (DID) technology to their banking app SOL. The DID enhances protection of users’ identification with easier access, while blockchain technology could lower the possibility of theft, falsification or forgery, compared to the nation’s prevalent financial authentication certificates. The bank joined hands with blockchain platform company ICONLOOP to develop the
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