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South Korean local media reported on Monday, the 10th of December 2018 that Shinhan Bank, a leading South Korean bank, has begun a process of implementing blockchain solutions in its daily working process. This project is part of a broader plan that aims to integrate new technologies with traditional financial services systems.
A bank official who spoke on the condition of anonymity stated the following:
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. The program will be expanded after it proves to be stable. We will continue to develop new technology that can be put in place for various departments.
Due to blockchain’s capability to track all activities, Shinhan Bank decided to use distributed ledger technology (DLT) in its internal protocols and systems. Meanwhile, DLT-driven solutions can improve transparency and trust issues while also implementing a package of standardized rules in managing financial records and thus delivering working efficiency on the other hand.
The bank said blockchain was fully adopted with transactions involving Interest Rate Swap (IRS) by the end of last month. This is the first time a local financial services firm has implemented blockchain technology in the sophisticated form of finance. The bank also adopted “Smart Contract”. This is a financial method used for derivatives transaction, where tasks formerly managed by workers are now undertaken by the computerized program. This leaves no room for error, thereby improving the accuracy and reliability of work products.
Shinham bank is yet to release information on the scale of the planned blockchain implementation. They set up a Blockchain Lab, which analyzes how blockchain can improve customer services.
About 400 Shinhan Bank senior officials and banking specialists were made to go for training sessions this year with the aim of getting them inspired by the DLT and encourage them to come up with ideas to facilitate the project in departments that require data sharing and verification with outside bodies.
Shinham Bank is South Korea’s second largest bank; it manages assets of over $260 billion and stores $192 billion worth of the Korean won. Shinhan Bank is one of the largest financial players in the Asian continent.