Gov’t to scrap notorious banking certificatesA complicated banking security system that confounded and infuriated foreigners and Koreans alike will soon be shut down.
The public certification system, considered one of the most cumbersome processes in Korean online banking, could be scrapped later this year, according to the Ministry of Science and ICT Thursday.
The system is due to be abolished as part of a proposed amendment to the Digital Signature Act. The ministry will gather feedback on the amendment from experts and the public over the next 40 days.
The public certification system, which makes it mandatory for online or mobile banking users to install an authentication certificate on their computers and phones in order to access banking services, has been criticized for its complexity.
The system was initially implemented in 1999 to enhance security in the verification process for online transactions. At the time, the government insisted that only a single type of digital certificate could be used - the “public” system. Insiders believe that this lack of flexibility obstructs technological development and prevents the Korean banking system from truly advancing beyond its late-’90s roots.
Rapid advances in biometric and blockchain-based authentication have fueled demand for the existing certification system to be scrapped. These new technologies are faster, more convenient and considerably less cumbersome, though IT experts are still working to improve their security level.
If the bill passes, companies will be able to adopt different authentication systems. The unpopular public certification system will remain an option for any company that wants to stick with the existing system.
In order to ensure the level of security is not compromised, the Science Ministry plans to create new guidelines for certification. Every authentication system will have to match internationally agreed security standards.
Commercial banks including KB Kookmin Bank, Shinhan Bank, KEB Hana Bank and the Industrial Bank of Korea are already preparing to test blockchain-based authentication from April. The Korea Federation of Banks, which represents banks in Korea, is leading the project to apply blockchain technology to digital certificates with 18 commercial banks.
The proposed amendment still needs to pass the National Assembly. Once it is approved it will take about six months before it is implemented.
BY KIM JEE-HEE [firstname.lastname@example.org]
More in Finance
Nikola fraud accusations hit Korean investors hard
Kakao Pay's Pavlovian account will mine your data for you
Kospi drops 2 percent as Covid situation worsens overseas
Banks follow the money to church and hope for data
Stocks drop almost 1% as investors question valuations