Blockchain for Banking Identity

7 Korean banks go live with blockchain decentralized identity service

decentralized identity

Yesterday it was announced that Korea’s BankID, a decentralized identity (DID) solution called MyInfo, went live on August 27 with seven banks. The solution was a joint development between the Korea Financial Telecommunications and Clearings Institute (KFTC) and Raon White Hat, a subsidiary of Raon Secure, the developer of the OmniOne blockchain.

Users create a digital identity with any of the banks by providing the usual sort of documents. The details of the digital identity that’s created are securely stored on the user’s smartphone. The customer can use the DID for bank logins and if the person wants to make an application at a different bank, they can share selected details from MyInfo with the other bank. The wallet stores details such as mobile phone number, address and e-mail. It also includes a bio identity, which may involve facial recognition.

Raon first started working with KFTC when KFTC was exploring robo advisers for wealth management. One of the obstacles to the adoption of these software solutions is identity because it’s a hassle for users to verify themselves for each piece of software. By creating a decentralized identity solution, consumers prove their identity once. They can then use any robo adviser applications that support BankID without going through the whole process again.

While the solution is compliant with W3C standards, there are considerable differences between DID solutions, particularly regarding what is stored on the blockchain. We believe that in this case, verifiable credential issuance information is stored on the blockchain as well as the decentralized identifier (DID), at a minimum. We have requested additional details but didn’t get a response in time for publication.

A possible drawback in storing the user DID on the blockchain is the potential to build an extensive digital trail. Even though financial data is associated with a DID, not a person, that could be traced back to their name and address. Many DID solutions avoid publicly storing DIDs for this reason. This is one of the clarifications we requested from OmniOne.

The consortium of banks, the Financial Distributed ID Promotion Council, plans to introduce other non-bank use cases for bank issued verifiable credentials. One can imagine a bank-issued credential that might be used to prove creditworthiness when renting an apartment.

The seven banks that have gone live are Shinhan Bank, Woori Bank, NH Nonghyup Bank, Industrial Bank of Korea (IBK), Busan Bank, BNK Kyongnam Bank, and the Korea Development Bank.

There will be 16 banks by the end of the year, with the other banks set to join as Standard Chartered Korea, Hana Bank, Kookmin Bank, Suhyup Bank, Daegu Bank, Gwangju Bank, Jeju Bank, Jeonbuk Bank, and K-Bank.

Meanwhile, Raon and OmniOne are also involved in the LG CNS project to implement Korea’s blockchain-based driver’s license solution to provide a national identity credential. Both Raon and KFTC are members of the DID Alliance, one of several decentralized identity initiatives in Korea.

Image Copyright: berya113 / BigStock Photo