South Korea’s Shinhan Bank adopts blockchain technology for Interest Rate Swap transactions

South Korea-based Shinhan bank is seeking to expand the use of blockchain technology in its processes, The Korea Times reported.

The bank has reportedly started a project to implement blockchain-based work process in a bid to prevent human error. The initiative is being led by the bank CEO Wi Sung-ho.

Shinhan Bank said that it fully adopted blockchain technology with transactions involving Interest Rate Swap (IRS) late last month. In addition, it has also adopted “smart contract” – the self-executing contracts running on top of blockchain.

"Prior to the blockchain-based process, there had been no standardized rules governing keeping and managing financial records, a reason why market participants had to rely on their own records which often times led to errors despite the cross-checking process requirement," a Shinhan official said (as quoted by The Korea Times).

"The new system helps remove such human errors and helps improve work efficiency through clearer, task-related communications rather than wasting time on correcting mistakes. The program will be expanded after it proves to be stable. We will continue to develop new technology that can be put in place for various departments."

Recognizing the potential of blockchain technology, Shinhan has already set up a blockchain research center under its Digital Strategy Department. The bank is working on an integrated certification system for various financial activities such as online wire transfer and foreign exchange. In August, it partnered with telecom giant KT in order to jointly build a blockchain-based service.