BankID, a blockchain-based identity verification service run by a banking consortium after the abolition of the accredited certificate, is effectively on its way out. BankID is a blockchain-based authentication service jointly created by banks in 2018 under the name BankSign. The phaseout of BankID is seen as stemming from its lack of user convenience and banks strengthening their own authentication systems.
According to the financial sector on the 15th, NH NongHyup Bank is introducing a new identity verification method, the NH Certificate, starting today. First launched in 2022, the bank's in-house certificate features enhanced security. Until last year, NH NongHyup Bank was the only one among the five major commercial banks that still offered the BankID service, but it ended the service in the first half of this year and, after being newly designated as an identity verification institution by the Korea Communications Commission in Apr., has been focusing on its own authentication.
Kbank, the only internet bank that had adopted BankID, will also end its BankID service at the end of this month. Earlier, Shinhan Bank ended its service late last year, and Woori Bank did so at the end of 2023 in quick succession. In the financial sector, the only users of BankID are Welcome Savings Bank among savings banks and some regional banks. A Welcome Savings Bank official also said, "Usage of the BankID authentication system is so low that it is virtually meaningless."
BankID is a blockchain and decentralized ID (DID)-based authentication service newly launched by the Korea Financial Telecommunications and Clearings Institute in 2021 after taking over BankSign, which began in 2018 under the leadership of the Korea Federation of Banks. Its predecessor, BankSign, saw low usage and was fully discontinued four years after launch. To address this, 16 companies—including commercial banks, regional banks, internet banks, and savings banks—collaborated on BankID, but as individual banks rolled out their own financial certificates, usage declined and the service is now on track to be phased out.
Banks are focusing on strengthening personal authentication services. After the Electronic Signature Act was revised in Dec. 2020, banks rushed to collaborate individually with the Korea Financial Telecommunications and Clearings Institute to introduce their own financial certificates, making it unnecessary to grow BankID, the joint authentication service for the banking sector. In particular, BankID's strength lies in sharing data among multiple banks, but as commercial banks left BankID and reinforced their own certificates, that advantage faded.
Although it started with the aim of eliminating the inconvenience of the accredited certificate, many saw it as effectively an accredited certificate with blockchain technology added. Critics also noted that it is hard to use on a standalone basis on PCs and slower than private certificates in terms of speed. By contrast, banks' in-house authentication systems not only produce a "lock-in" effect that keeps customers within their ecosystem, but also offer the advantage of collecting and analyzing customer data more precisely.
This year in the financial sector, interest in banks' own authentication services is high due to the government's expansion of its mobile ID program. On the 23rd of last month, the Ministry of the Interior and Safety expanded mobile ID issuance beyond the government's official apps such as the existing "Republic of Korea Mobile ID" application and Samsung Wallet. As a result, financial consumers can use proprietary mobile IDs created by ▲ KakaoBank ▲ KB Kookmin Bank ▲ NH NongHyup Bank ▲ Toss ▲ Naver across public institutions and financial institutions.