Banks Enter the Telecom Operators' Stronghold of Identity Verification Market

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[Asia Economy Reporter Minwoo Lee] Major commercial banks have obtained qualifications as identity verification agencies. As they make a full-scale entry into the identity verification market dominated by telecommunications companies, competition is expected to intensify.

According to the financial sector on the 4th, on the 29th of last month, the Korea Communications Commission held a plenary meeting and approved the designation of four institutions?KB Kookmin Bank, Shinhan Bank, Hana Bank, and KakaoBank?as identity verification agencies. Identity verification agencies are institutions that verify identity online using means other than resident registration numbers, such as i-PIN, mobile phones, credit cards, and certificates, in accordance with the Information and Communications Network Act. This allows banks to actively enter the identity verification market, which had been virtually monopolized by the three major telecom companies.

Earlier, the Korea Communications Commission conducted document reviews and on-site inspections from the end of March to early last month for the four banks that applied for identity verification agency designation earlier this year. As a result, all the candidate banks received a 'suitable' rating. The evaluation scores were KB Kookmin Bank (923.25 points), KakaoBank (876.75 points), Shinhan Bank (856.00 points), and Hana Bank (837.38 points), in that order. They are expected to enter the identity verification market in earnest after addressing some issues pointed out by the Commission.

In the case of KB Kookmin Bank, it has acquired three types of government certifications: electronic signature certification service provider, certified electronic document intermediary, and now identity verification agency. Accordingly, KB plans to actively utilize the KB Mobile Certificate as a substitute for resident registration numbers. It will be available on the KB Financial Group platform starting in the second half of this year, with plans to expand its use to external institutions in the future. Hana Bank also plans to add identity verification services to its electronic signature certification service "Hana OneSign Certificate" after completing the requested improvements by the Commission, aiming for a revamp within this year. Shinhan Bank and KakaoBank have yet to announce specific schedules for service expansion.

With the identity verification market landscape, which had been virtually monopolized by telecom companies, now broken, a competitive structure is forming, which is analyzed to potentially reduce cost burdens for e-commerce companies. Additionally, it is explained that this could serve as an incentive to attract those who have not yet obtained joint certificates or similar to start financial transactions through each bank’s platform in the future. Professor Kyungjin Choi of Gachon University Law School said, "Ultimately, the creation of a competitive market structure is inevitably beneficial to consumers," adding, "The use of bank certificates may increase in simple financial transactions that do not require certificates, which could become a business opportunity for banks as well."

This content was produced with the assistance of AI translation services.