The News Asia reported on July 13 that the Bank of Korea, together with the Korea Financial Settlement Service (KFSS), will now take over the management of Samsung-owned BankSign.
In a move to digitize the country’s financial framework, the South Korean central bank has taken control over the BankSign, South Korea’s blockchain solution for the banking system, designed by Samsung SDS Co. in 2018. Representing around 60 Korean as well as overseas banks with Korean operations, the project cost the government billions of won just to get it up and running.
BankSign – South Korea’s step toward digital banking
Launched by the Korea Federation of Banks (KFB), the BankSign blockchain platform sought to transform online and mobile banking by enabling secure and faster verifications. With confirmation from one bank, users could conduct multiple transactions across different banks. This service was hailed as a gamechanger not only for the Korean banking industry but also for the mainstream adoption rate of blockchain.
On Monday, the Bank of Korea announced acquiring this Samsung-backed blockchain authentication service to further the use of blockchain in the Korean banking industry. The move, however, had other motives too behind it. The existence of the public certificate or the digital authentication certificate made it increasingly challenging to implement the effective delivery of financial services.
It necessitated the use of multiple software to use it, which resulted in the entire process, becoming extremely time-consuming and vulnerable to technical glitches. It was also incorporated into several government and financial entities.
Bank of Korea to bring BankSign back into business
Thus, the Bank of Korea intends to take matters into its own hands by overseeing the management of BankSign and finally put an end to the much-dreaded system of a public certificate.
Moreover, the COVID-19 outbreak has rapidly increased the demand for online and mobile banking services as a means to avoid face to face contact. The blockchain-based BankSign automates several mundane manual tasks such as data consolidation, payment settlements, and documentation management, thus paving the way for a digital future.
An official from Bank of Korea stated in the announcement that the central bank, together with KFSS, will aim to fully replace the digital ID framework with the BankSign infrastructure by the end of 2020. Once that is achieved, the financial services industry will witness a substantial reduction in operational costs, improve consumer experience with value-added services, and help banks discover new and potential revenue streams, he said.