Shinhan Bank, one of the oldest banks in South Korea, is implementing a blockchain loan verification system to accelerate the time it takes to approve loan products.
According to reports, the blockchain platform will enable the bank to verify the items of proof required to negotiate and close these loans. These include qualification and certification documents.
Blockchain Loan Verification
Until now, customers had to submit documents associated with credit lending directly to the bank for manual verification and processing. Not only was this time-consuming, but it also resulted in inconsistencies and errors. Implementing the blockchain verification system will allow the bank to automate these processes and reduce operation risks by making the documentation process safer and transparent. In addition to increased efficiency, the new system will also lower associated administrative costs.
Shinhan Bank has incorporated blockchain technology into its loan process to facilitate confirmation and verification within a network of affiliated banks and institutions. The loan system allows parties multiple parties to have instant access to a digital database containing all the information needed to process loans. It also ensures that participants can have simultaneous access to a constantly updated digital ledger that cannot be altered.
A Shinhan Bank spokesperson said (via online translation):
“The introduction of the blockchain qualification system will contribute to the activation of non-face-to-face products. We will make efforts to increase customer convenience and expand accessibility by launching various non-face-to-face products.”
The bank has already used its platform to disperse certain types of loan deals. It has garnished attention in particular with its new ‘Shinhan Doctors’ loan product.
Shinhan Bank Blockchain Initiatives
The loan verification system is not the first blockchain project Shinhan bank has undertaken. Since last year, the bank has been actively seeking to expand the use of blockchain technology in its business processes. It started using distributed ledger for transactions that involve Interest Rate Swap (IRS). This enhances all efficiency and prevents human error. Additionally, Shinhan adopted smart contracts to improve the accuracy and reliability of work products.
Lastly, the bank piloted cross-border remittances for business customers last year using Ripple’s blockchain technology.