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 a mobile identity app ZZeung with the data 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. The identity is verified using a Korean telecom service and a verifiable credential is issued on a public blockchain. Personal data is not stored on the blockchain, which is used for the authentication process. The data can be used with Shinhan’s mobile banking application, SOL.
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 use their fingerprint. This means customers don’t have to do cumbersome identification processes with multiple organizations. To verify and prevent forgery, a private blockchain is used for this functionality.
“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, Shinhan Investment, NH Nonghyup Bank and IBK Industrial Bank . 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. And it was also a co-founder of the DID Alliance.
Update: This article has been significantly updated based on information from ICONLOOP.