Two of South Korea’s largest banks are set to launch a blockchain-powered digital certificate platform for military personnel – which will allow soldiers to use smartphone-based ID solutions to open savings accounts without having to set foot in a brick-and-mortar bank branch.
Per the media outlet White Paper, the banks – Kookmin Bank (KB) and IBK Industrial Bank – have struck a cooperation deal that also involves the Military Mutual Aid Association public pension fund, the Korea Financial Telecommunications and Clearings Institute (an inter-bank payment systems provider) and Raon White Hat, an information security service provider that specializes in blockchain-based distributed identity authentication (DID) services.
Initially, the platform will allow KB to offer contact-free, remote access to its KB Soldier Tomorrow Reserve Savings (literal translation) financial product – a banking service designed exclusively for active-duty soldiers as of June this year.
The platform will make use of DID technology, allowing soldiers to obtain and make use of digital proof-of-identity certificates required to access the product.
The bank stated that soldiers would be able to access banking services and sign up regardless of their location and COVID-19-related restrictions – with provisions also made for personnel serving in units where smartphone usage is limited or restricted.
South Korean law requires all able-bodied males to serve in the armed forces for at least 18 months, and the nation also has a sizeable standing army. As of 2020, the nation’s military has a personnel strength of 3,750,000, with over 0.5 million deployed on active duty.
Numerous social groups have raised concerns over conscripts’ access to financial products during the time of their service. Some are angry that not only are conscript soldiers excluded from the job market during their military service, but also that they have their earning power damaged during their service by conscription-related laws.
The government has responded by extending a system of subsidies. And it appears the new KB offering seeks to tap into this, offering benefits such as a 1% interest subsidy and a social rehabilitation subsidy that is paid from the national budget – into tax-free savings accounts, with rates of up to 5.5% per annum.
Blockchain-powered DID services are becoming more commonplace in South Korea, where experts have previously spoken of a coming “war” between the many companies – including telecoms giants and hardware behemoths – hoping to implement a range of contact-free, paper- and plastic-less ID solutions.