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Four leading commercial banks in South Korea – KB Kookmin, Shinhan, Woori, and KEB Hana Bank – along with the state-run Industrial Bank of Korea (IBK) have formed a “technology and service alliance” with blockchain firms, Business Korea reported citing industry sources.
The commercial banks have been actively involved in the blockchain space and have been conducting a number of blockchain pilots.
In June, the Ministry of Foreign Affairs announced a blockchain pilot that aims to verify the authenticity of the notarized financial power of attorney from diplomatic office. The project sees participation from 14 domestic banks including Shinhan, Woori, KB Kookmin Bank, and KEB Hana, among others.
KB Kookmin Bank, Shinhan Card and Woori, have also been selected in the Financial Services Commission’s (FSC) regulatory sandbox, which was set up earlier this year, to test their innovative financial services.
The second batch of the sandbox included Kasa Korea which was approved to test a blockchain-based financial service that issues and distributes mortgage-backed securities (MBS) in a form of electronic securities. Business Korea reported that KB Kookmin Bank and KEB Hana Bank were selected as the partners for the project.
In June, KB Kookmin Bank teamed up with blockchain startup Atomrigs Lab to develop digital asset management services. In the same month, Samsung Electronics, SK Telecom, KT, LG UPlus, KEB Hana Bank, Woori Bank, and KOSCOM joined forces to build a blockchain-based identification platform.
Last month, Woori Financial Group partnered with Kakao’s blockchain subsidiary Ground X to develop blockchain-based financial services. Shinhan Bank also teamed up with Ground X and Hexlant to build a Private Key Management System for its banking services.
As previously reported, Shinhan Bank sought to expand the use of blockchain technology in its processes since last year. It fully embraced blockchain technology with transactions that involve Interest Rate Swap (IRS) and smart contracts. Earlier in May, Shinhan Bank unveiled a blockchain-based platform to hasten loan process.
“Traditional financial firms which experienced fintech innovations in the Mobile Age, such as simple money transfer services Toss and Kakao Bank, are now seeking to develop blockchain-based financial products. They run internal blockchain-related units and hire experts in the sector to integrate blockchain technology with their own financial services,” an official from a blockchain company was quoted saying.
Given the various blockchain-based projects undertaken by these banks, it only seems natural for them to team up with blockchain companies to advance their efforts.
