Korea Joongang Daily reported yesterday that the Korean Federation of Banks will be releasing a new blockchain-based ID system in July. The system is called ‘BankSign’.
The KFB, an organisation made up of the country’s commercial banks, hopes that BankSign will be an improvement on the existing public certification system. The current system was created 20 years ago and is, according to Korea Joongang Daily, “notorious for its complexity and inconvenience.”
According to Forbes, purchasing goods and services online in South Korea entails a series of identity checks which require the user to download a number of security programmes which will only be active on a single designated device. These programmes are known to slow devices down considerably, and for desktop computers, they only work on Internet Explorer.
The old system is based on software called ActiveX which was modern in 1996 but hasn’t progressed too much since. As a result of the reliance on redundant technology, hackers managed to gain access to the ID codes of as much as 80 percent of the country’s population in 2014. A study by Research Gate that same year estimated annual national losses to hacks at between $10 billion and $40 billion and recommended that a more sophisticated system be implemented.
The member banks of the KFB began developing BankSign in November 2017, and beta testing began the following April.
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Park Chang-ok, a manager at the department of deposit services and payment systems at KFB, said: “With BankSign, banks will have options to choose from in verifying consumer identity, not just the public certification system.”
The blockchain upon which the system is based is called Nexledger. It was created by Samsung as a blockchain for businesses.
A KFB spokesperson said: “BankSign is the first project co-developed by the local banking sector utilizing blockchain technology. While BankSign will start off by providing the service in the banking sector, we will work with the government and other public organizations to expand its usage.”
De Nederlandsche Bank: “The current payment systems are very efficient”
Meanwhile, the central bank of the Netherlands has decided that blockchain technology is not yet ready to be implemented in finance. De Nederlandsche Bank announced last week that after three years of testing, it has come to the conclusion that the technology is not yet adequate to safely handle the massive volumes that pass through the international market.
It said: “The current payment systems are very efficient, can handle large volumes and provide the legal certainty of having paid. The blockchain solutions tested show that they are not sufficiently efficient, with regard to costs and energy consumption, and they can not handle the large numbers of transactions.” It did add that it finds the technology to be of interest and will continue testing it.
This echoes a conclusion reached by the Bank of England in July 2017, in which it said that these systems work but are “not sufficiently mature”.