Japanese regulator and banks plan shared ID system on blockchain
The Financial Services Agency of Japan and some of the nation’s banks are planning to develop a shared identification system on blockchain.
According to the Nikkei Asian Review, consumers will be able to open accounts at multiple banks and financial houses without having to re-enter personal information.
The Nikkei Asian Review explains that in this set-up, an account holder at one bank can register for a shared ID. If the individual wishes to open an account at a second bank, all he/she needs to do is provide the common ID through a smartphone app, and confirm his/her identity through fingerprint or facial scan. The personal data will be stored and administered on blockchain.
The regulator, which is establishing a fintech testing hub for start-ups this week, plans to begin the shared ID tests next month. The trial will extend to spring next year and “will determine the risk for data leaks or other problems”. If all goes well, the three banks mentioned above will launch the service soon after.
According to the Nikkei Asian Review, because of Japan’s identity verification requirements, it could take a week or so to receive a cash card after the initial request. Even if a person opens an account via smartphone, the user still has to verify their identity via mail.
Dai Nippon Printing will also join the testing hub by developing equipment that will dispense cash cards once the account holder is verified. The process will involve facial recognition and scans of chips embedded in driver licences and other ID cards.
In a flurry of separate developments, Banking Technology reported last week that banks and politicians in Japan are getting ever more energetic for fintech with grand plans for APIs, artificial intelligence (AI), digital currencies, blockchain, funding for start-ups and an easing of regulations.