On Monday, the Korea Financial Telecommunications and Clearings Institute (KTFC) announced the launch of blockchain-based digital IDs for financial services. The organization aims to streamline consumer processes such as renewing loans and opening bank accounts. The IDs are designed to be interoperable between service providers, and already have more than 30 firms signed up.
Non-profit payments institution KTFC has launched multiple clearing, bonds, and inter-bank systems. Its announcement gives an example of a worker who needs to renew their loan. Currently, they need to get documents such as income and tax details from their workplace, then go in person to a bank branch.
With decentralized identities (DiDs), they can instead link with their bank on a smartphone and send digital documents remotely, completing an application with just a few taps. Once a trusted institution authenticates a DID, it is stored immutably, so the consumer can use an accompanying biometrics app to verify their identity on the go.
The use of blockchain provides a decentralized system which can be used for in many industries and between separate organizations. Indeed, 30 banks, securities firms, insurers, electronics manufacturers, and public institutions have signed up. The KTFC envisions the ID being used in the same way as a physical driving license, providing verification wherever it is needed.
To achieve this, the system has been built in line with global standards from the World Wide Web Consortium (W3C) and domestic regulations. Furthermore, the IDs will be self-sovereign, in that they are generated and controlled by the consumer.
While this KTFC project claims to be the first commercializing DiDs in Korea, identity firm ICONLOOP announced the completing of a Series A funding round last week. Raising over $8 million from 27 firms, the tech company also plans to create a cross-industry self-sovereign ID system.
“The market has been paying greater attention to DID services and I have a high expectation on ICONLOOP,” said Junsu Kim of TS Investment, which participated in the funding round. “It already has the three pillars of success — clear business model, partners participating in service expansion, and proven technologies.”
With its own open-source blockchain, ‘loopchain’, and a planned regulatory foundation, ICONLOOP looks to have a head start. The firm partnered with Korean insurer KT Holdings last year for blockchain projects in finance. Its commercialized service is slated for launch in the first half of next year.
And there’s a third major Korean blockchain identity initiative. All the major mobile operators SK Telecom, LG U+ and KT partnered with Samsung, and two banks, KEB Hana Bank and Woori Bank, to launch an identity scheme next year.