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Shinhan Bank Partners with ICONLOOP for Advanced KYC Verification System 

iconloop blockchain

The integration of blockchain and traditional finance is beginning to take off. Besides basic integration and testing, it seems local banks are now partnering with blockchain firms. Yesterday, ICONLOOP, a local blockchain technology firm, announced that it had partnered with Shinhan Bank to provide the latter with seamless customer identification services.

Easier Access for Customers

Per the company press release, ICONLOOP will issue Know-Your-Customer (KYC) certificates to Shinhan Bank and its customers. The tech firm will license its Zzeung mobile app’s blockchain-based decentralized identity technology to Shinhan’s customers, effectively making the account opening process seamless.

As the company explained, the blockchain compliance certificates will allow Shinan’s customers to bypass archaic KYC compliance methods to request a bank service. Once customers verify their identities with the app, Shinhan will be able to verify their details and issue certificates. Customers can use these certificates to request password changes and other security features.

Jong-hyup Kim, ICONLOOP’s chief executive, explained that the move is a significant one because Zzeung is the only commercial decentralized ID system to operate in South Korea’s financial sector.

“In the future, we will expand the Zzeung to all industries that require identity verification beyond the financial sector so that more users can experience the convenience of DID technology,” Kim added.

South Korean Banks on the Crypto and Blockchain Bandwagon

The move also marks the second blockchain and crypto-friendly move from Shinhan Bank. The bank, which is the oldest and second-largest in South Korea, has about $375 billion in assets under management.

Earlier this month, Econonews reported that Shinhan Financial Investment, Shinhan Bank’s brokerage arm, had been working on launching a blockchain-based peer-to-peer stock lending platform. The news medium explained that the platform would most likely be launched towards the end of the year, to cut out the intermediary in stock lending transactions.

As the bank explained, the process of borrowing and lending securities has become overly complicated and expensive over time. With a p2p service, stock owners can lend their holdings to one another quickly and at lower prices. Simultaneously, the process doesn’t affect their commissions.

The platform will also benefit short sellers, as they will be able to borrow stocks from willing counterparties without having to pay so much. Shinhan Bank has also recently committed to providing crypto custody services. Local news sources confirmed this month that Shinhan, as well as fellow top bank Woori Bank, had announced its intention to launch “crypto asset services” in response to the country’s amended special Financial Transactions Information Act. 

The Act plans to change the legislation surrounding cryptocurrencies from next year, thus improving investors’ access. While Shinhan Bank had announced its plans to move into crypto custody as far back as 2018, the government thwarted its plans. Now that regulations are clearing up, the company is readying itself for another go. 

Along with Shinhan and Woori, NongHyup Bank and Koomin Bank have also expressed their interest in crypto custody services. Together, these make four of South Korea’s five largest banks, with over $1 trillion in assets under management.

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.