South Korea’s oldest bank, Shinhan Bank, has launched its nation-wide lending platform on blockchain, to speed up the loaning process, as reported by South Korean media outlet Yonhap on May 27th.

The new system now enables people to apply and receive loans online, without even interacting face to face with lending officers at the bank. The system intends to make the loaning process more efficient by eliminating the human element. The report suggests that this is one of the first initiatives of its kind in South Korean banking sector, and its success may see other banks coming up with their own lending platform.

The platform uses blockchain in the verification and confirmation processes. Currently, the banks don’t require employment certificate and income documents from the people applying directly; instead, the system utilizes the data obtained from the governmental departments and public corporations. However, the banks have to spend a considerable amount of time and resources to get these documents verified.

READ ALSO: Not Cryptos but CBDC is a Novel Type of Money: EU Central Bank Executive

The new system that has been put in place creates a new eligibility verification system in which the banks are directly partnering up with the companies. The system allows companies to register and operate in the network through a one-time encrypted password making the verification of the necessary data easy and seamless.

Bank officials have commented that the platform is part of their broader vision of providing remote services to their customers without the need of visiting a physical bank. He said in the statement:

The introduction of the blockchain qualification system will contribute to the activation of non-face-to-face products. We will make efforts to increase customer convenience and expand accessibility by launching various non-face-to-face products.

Shinhan Bank’s Blockchain Project

Shinhan is the oldest and the second biggest commercial bank in South Korea. It provides banking services to almost 18 million customers. This is also not the first blockchain project by Shinhan as the bank has embraced the technology in the past too.

READ ALSO: Global Coin: Facebook’s Crypto for the Unbanked Incoming 2020

In December 2018, the bank announced that they are utilizing blockchain in record keeping, eliminating the human error, as reported by the Korean Times reported the news in December. The bank had for the first time in South Korea also implemented interest rate swap transactions using the blockchain platform in November. A Shinhan official said:

“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 new system helps remove such human errors and helps improve work efficiency through clearer, task-related communications rather than wasting time on correcting mistakes”.

READ ALSO: Cryptos and Banks Can Work Together: Ripple CEO Think So

The projects were created by the Blockchain Lab, an internal research initiative by the bank. The Lab conducted training sessions for the company officials in customer services where they were asked about their ideas for improvement. There were more than 20 sessions from March to November 2018. More than 400 working level senior officials participated in these training sessions.

Similar Initiatives by Other Banks

One of the earliest financial institutions which utilized blockchain for record keeping was Thailand’s Kasikorn Bank. In 2016, the bank announced a partnership with technology giant IBM to create a blockchain based record keeping system as a cost-cutting measure. The bank was also in talks with other commercial banks in Thailand in hopes of establishing a collaborative effort in the blockchain space, connecting the country’s financial system by creating a blockchain network between different banks. Kasikorn was one of the first banks to implement the system. Since then the banking system has seen a rare interest in blockchain uses.

READ ALSO: A Central Bank Executive Just Took a Bitcoin U-Turn

Earlier this month, the central banks of Singapore and Canada implemented a cross-border payment system using blockchain. The central banks of Singapore and Canada sent each other digital currency using the blockchain network, co-created by both the countries. The transaction was part of two separate projects being pursued by both the nations; the Bank of Canada’s (BoC) “Project Jasper” and the Monetary Authority of Singapore’s (MAS) “Project Ubin”. The transaction was made possible with the help of JP Morgan, an American multinational bank and the accounting giant Accenture. Both companies are currently developing their blockchain based payment system. Both JPM and Accenture are leading the way in the current blockchain race in the financial sector with their cutting edge blockchain platforms.

READ ALSO: Bank of France is on the Verge to Launch Its Own Stablecoin