The Korea Financial Investment Association, also known as Kofia, an industry body that covers financial technology in the country, announced Tuesday the launch of a new blockchain-based commercial security network.

The platform, called Chain ID, would allow financial and merchant firms to securely share customer information and identification online. Kofia Chairman Hwang Young-key (pictured) revealed during a conference that the Chain ID platform is based on private digital ledger technology, or blockchain, and smart contract technology. The Chain ID system was developed for the association in partnership with Sheoul-based startup theloop Inc.

“An increasing number of major global financial players are getting interested in the blockchain technology as a key part of Industry 4.0 and are trying to turn it into their business model,” Hwang said during the conference, quoted by Business Korea. “We are planning to reach the international standardization of the Chain ID by linking it to systems of many different countries.”

According to the Korea Herald, the newly launched service will be available to 11 local securities firms out of 56 in Korea. By going through blockchain authentication in one of these firms, a customer would not need to go through the process again to identify themselves to other participating firms.

This is a huge boon for the Korean investment industry, Hwang said at the conference, since customers of multiple firms previously would have to authenticate multiple times – once for each different firm involved in transactions. Hwang added that the use of blockchain technology will help reduce costs and increase efficiency between financial firms.

Additionally, customers will be able to choose their authentication method from options such as passwords and bioauthentication and the identification certificates produced by Chain ID need updates only every three years, based on the enhanced security.

Across the globe, financial technology industry companies and enterprise services have experimented with blockchain technology for authenticating users and securing information. Using a blockchain, it is possible to maintain a secure list, called a ledger, of encrypted information that can only be unlocked by appropriate users – those who have the encryption key. The ledger is also shared between parties so it is difficult to falsify entries.

Similar efforts to the Kofia Chain ID system have emerged this year, although for more general purposes than financial institution user identification. In June, Microsoft and Accenture teamed up to build a blockchain global ID platform for government documents. Blockchain firm ShoCard raised $4 million to build an enterprise identity management system in August.

As the industry grows, more companies look to use this technology to better secure customer information and records. Further examples include the September launch of the IZNES blockchain platform from London-based settlement system developer SETL Development Ltd. and the launch of a “Know Your Customer” identity tracking platform from Signzy Technology Pvt. Ltd.

The Kofia-led consortium behind the development and launch of Chain ID formed in October 2016 and is composed of 26 firms in the financial investment sector and five companies focused on blockchain technology.

The Chain ID launch is joined by 11 consortium members in Korea: Daishin Securities, Meritz Securities, Shinhan Investment, Yuanta Securities, Eugene Investment & Securities, eBEST Investment & Securities, KB Securities, Kiwoom Securities, Hana Financial Investment, Korea Investment & Securities and Hanwha Investment & Securities.

Photo: Kofia