Shinhan Bank, the oldest bank in South Korea, announced on May 27 that they would be launching a new blockchain based platform that would make the lending process a whole lot faster for consumers. This comes as the bank has recently stopped issuing virtual accounts for investors interested in digital currencies.
The financial institution is looking to use this technology to decrease costs and increase efficiency in the lending process. This will enable consumers to be able to apply for loans online and have their credit history and financial health evaluated without their ever needing to be a face-to-face conversation with a bank employee.
This, according to the bank, will be the first platform of its kind. It will be a system that is unknown to the South Korean financial world. This new system will allow for verification and confirmation in a quick and easy process for consumers, which could easily catch on within the country and become the standard across the banking industry.
This is not the end of their goal, however. Officials with Shinhan Bank have explained that they intend to use the blockchain technology to provide consumers with additional remote services to enhance the banking experience. The ability to provide a greater amount of remote access while not decreasing security is essential and should have a dramatic impact on the banking system within South Korea.
For those surprised by the use of blockchain technology in their new platform, don’t be. It is true that Shinhan Bank has been one of the primary opponents in South Korea in terms of virtual accounts being created and serviced within their institution. However, Shinhan Bank may have an ulterior motive in mind.
The move to offer this new loan processing system could be a reaction to a push by the Central Bank of South Korea to move toward a cashless system. This, too, has also been opposed by Shinhan Bank, who has expressed concerns about the government attempting to move away from physical currencies, a plan that has been tossed around since 2017.
The financial institution has expressed concerns that this cashless system will open the door for an underground economy that could be detrimental to the overall society, as well as reducing tax revenue.
The move to offer an expedited loan processing service could greatly enhance and increase the power of South Korea’s second largest banking entity. If more consumers were to start using Shinhan Bank as their loan processing institution, the bank would likely be able to stand in the way of any removal of hard currency as a means of conducting transactions.
At the very least, it would give them a leg up on the processing of these kinds of transactions should a cashless society be reached. This would give them the kind of innovative technology that would put them ahead of many of their competitors.
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