KB Kookmin Card Co. introduced a blockchain-based personal authentication system for its bank service users from November last year, becoming the first Korean financial institution to adopt such a simplified, but more secure mobile payment verification system in Korea.
According to financial industry sources, KB Kookmin Card in partnership with Bitcoin exchange service startup Coinplug Inc. released a blockchain-based personal authentication service for mobile financial transactions. It is the first of its kind in Korea, the company claims.
Blockchain technology is a public ledger of digital currencies where all participants have access to data blocks, or information, on financial transactions, rather than having a centralized ledger managed by a reputable intermediary such as a central bank. It is considered one of the most advanced fintech, or financial technology systems, and provides a high level of security for online transactions.
KB Kookmin Card’s blockchain-based verification technology will first be implemented in its mobile credit card app, simplifying the current system that requires additional personal authentication steps for logging in, registering a new credit card, and for making mobile payments of 300,000 won ($264.08) or above, the company said.
Market observers predict other banks and financial companies will soon follow suit of KB Kookmin Card and the blockchain-based personal authentication system will quickly replace the conventional financial transaction process in Korea. The current system that has posed an inconvenience, requiring online or mobile payment service users to have a verification certificate issued and renewed every year.
The current, more complicated verification process, has been blamed for discluding foreigners living in Korea and elders from the rapidly growing mobile or online market places in Korea, which often boasts that it is one of the world’s most wired countries.
KB Kookmin Card’s new blockchain-based system will allow its mobile credit card user to have a personal authentication certificate issued just once and enter a six-digit pass code, shorter than the current 10-digit code.
The credit card firm also expects the new system will lower its administrative expenses in issuing personal authentication certificates and managing customer data through an intermediate company since the blockchain network involves all users sharing transaction data, requiring no third-party institution for verification. Also, it is considered to be hacking-proof because it is difficult to forge transaction data.
In response to the diverse changes taking place in the Financial environment worldwide, KB Financial Group came into being with the establishment of KB Financial Holding Incorporated on Sept. 29, 2008, made possible by the comprehensive transfer of the stocks of major subsidiary.
“The group is Korea’s largest and leading provider of a comprehensive range of financial services, and we have the farthest-ranging customer basis and network of branches in Korea. KB Financial Holding’s subsidiaries include KB Kookmin Bank, KB Insurance, Hyundai Securities, KB Kookmin Card, KB Investment & Securities, KB Life Insurance, KB Asset Management, KB Capital, KB Savings Bank, KB Real Estate Trust, KB Investment, KB Credit Information, and KB Data Systems,” according to the group.
KB Financial Group says it is making efforts to enhance corporate value by continuous improvement of corporate governance and create sound and transparent management environment and doing its best to protect and improve the rights and interests of all the interest parties by operating independent board of directors and auditing organization with responsible management system.
Manager Byun Ki-ho of the Fintech Business Dep't of KB Card, explains the use of Blockchain at a recent meeting held at KB Card office.(Photos: KB Card)