Last week, South Korea announced that 26 million residents of Seoul would be able to benefit from blockchain-based ID cards, this week they announced a blockchain-based loan platform.
The oldest bank in the country, Shinhan Bank, has launched a brand new lending platform that runs on the blockchain and is designed to speed up the loan process. According to reports in South Korean news site, YNA, the software will boost efficiency and processing times, whilst lowering applicable administration costs. This means that members of the public will be able to apply online for a loan and receive the credit, without the need for a face-to-face interaction.
This new system will be the first of its kind in the country, but one of many, recent, pioneering blockchain-based software solutions.
The new lending system of Shinhan Bank will apply blockchain technology to verify and confirm applications across a network of affiliated institutions and banks. Via an encrypted one-time password, users will be able to quickly and easily access the data they need in order to approve and issue loans.
An official from the Korean bank stated that this recent adoption of blockchain technology is a part of the banks attempt to provide services to clients across the country, on a remote basis. They added that the bank intends to keep on developing innovation with remote access, with the aim of expanding accessibility.
Shinhan Bank is headquartered in Seoul and was historically the first bank in the country, established in 1897. Today it has over 13,000 employees, 1026 branches.
Over the last 12 months, the bank has embraced a number of blockchain initiatives including use in internal processes to reduce the risk of human error. They stated that:
“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,” the publication quotes an unnamed official as saying, adding:
“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.”
Then in November 2018, they announced the introduction of interest rate swap transactions using blockchain- another first for the lender.
The bank is pioneering the way in terms of blockchain use in the financial sector, but it hasn’t always been this way.
It is rumoured that the collateral for its very first loan at the turn of 20th Century was a donkey. The staff of the bank were entrusted with taking care of the donkey during the time that the loan was out and it was still being used as collateral.
Things have definitely changed!