As ICONLOOP announced at the end of last month — and as The Iconist dutifully reported here — the team’s “my-ID” solution was included into Korea’s Financial Services Commission (FSC)’s “Innovative Financial Services and Regulations Sandbox,” exempting the project from restrictions on licensing and sales activities.
This was no mean feat. Of the 105 projects that had applied to the FSC as of July 4, only 37 were approved. And of those, only five — including my-ID — were blockchain projects.
The Iconist recently communicated via email with Jay Kim, ID Business director of the project with ICONLOOP and CFO of ICONLOOP, to learn a bit more about the project and what makes it so special.
Untact banking made hassle-free
The my-ID service makes easier “untact” openings of bank accounts. In an untact opening, users open accounts or subscribe to financial instruments completely online without visiting a bank in person for a face-to-face verification. Since Korea first permitted untact openings of accounts in late 2015, technological development and the appearance of specialized internet banks have created more demand for the method. ICONLOOP anticipates millions of users per year will “untact” open an account.
With my-ID, a person uses information certified by a financial institution after storing it onto a device such as a smartphone. The process involves three parties: an issuer certifying the identification, a holder who has the certification and a verifier using the certified information. The holder submits to the verifier information certified through the issuer. The verifier can use the data stored on the blockchain to verify that the information is good. Blockchain’s decentralized infrastructure, which prevents a single party from monopolizing information, makes it an appropriate technological solution for this case.
In Korea, you currently need to jump through several hoops to untact open an account. You need to photograph your ID when you open the account, and you must make a real-time transfer from another account under your name. You must repeat these measures each and every time you open a new account. The my-ID service, however, cuts out the repetition by allowing you to reuse your photo and transfer information. “Instead of repeating the photography and transfer processes, you can submit the stored data,” says Kim. “You can send many different kinds of stored data at the same time. This makes registering for financial instruments easier.”
To ensure the quality of the information stored on your device and on the blockchain, the photo and transfer information still needs to undergo a one-time verification by a financial institution.Â Nevertheless, online banking becomes much simpler since you can now send information in real time without the need for verification procedures because you can use the trustworthy information you saved to the blockchain.
“It’s important to issue certified information that verifiers will accept as valid,” says Lim. “One of the special features of my-ID is that financial institutions issue certified information for the service.”
The my-ID service can work in conjunction with other ID services. For example, you can store information from the CHAIN ID joint authentication service. Kim says my-ID could embrace all digital IDs..
Growing official recognition
The FSC’s recent inclusion of my-ID into its “Innovative Financial Services and Regulations Sandbox” could be an important step forward in the mainstreaming of blockchain technology. It certainly seems to suggest that regardless of the government’s ongoing misgivings about cryptocurrency (see this post), it nevertheless sees considerable innovative potential in the underlying blockchain technology.
“By permitting the submission of stored IDs, we can read this as the FSC agreeing that there is value in the security and reliability of blockchain-validated ID storage,” says Lim. “Being able to apply the technological value of blockchain in real life and try it out in a permitted institutional sector will influence the direction of the blockchain industry.”
If the technology proves reliable during the sandbox period, it would undergo additional tests for up to two more years for possible inclusion in an actual written law or regulation.
Kim says a total of 17 companies have expressed interest in the service, including over 10 financial companies. This number is growing, however.
The my-ID services application beyond the financial sector are, in theory, endless. As The Iconist’s own Dean Baker wrote, “Every my-ID will be authenticated at a financial institution. Arguably the most respected form of authentication in Korea. Meaning, these IDs should also be accepted everywhere else.”
Kim concurs with this. “If it becomes possible to store certified IDs, we plan to use my-ID in other industries, too,” he says. “You could use it in many industries, for example, when authenticating drivers licenses in car sharing services or age verifications when buying liquor.”