Nowadays, banks are taking more interest in BlockChain as most of the banks have been surveyed in adopting the BlockChain from their early days of adoption. The banks are using the BlockChain strategy with formulating the three quarters that involve a proof concept with looking inside from beginning. Regardless of this, there are still more use cases used to include an intra-bank cross-border transfer. But when the bank wants to deploy the BlockChain, then it is expected that a wide range of benefits are added to it with lower cost, fewer errors and generate new revenue opportunities.
When we apply BlockChain in banks, then it takes the financial industry to make global payment. They both are traditionally conservative as they adopt new technology by adding innovation in the financial world and solving a problem or replace the system to make it work well. Going this far we can say that BlockChain is transforming everything from creating a transaction and raising private market with ease.
Before moving further let’s quickly know how BlockChain works in identifying the potential hurdles and other areas. We know that BlockChain is also called as distributed ledger technology that was invented and support by crypto-currency Bitcoin. It comes along with secure transaction, immutable, making the transaction more efficient with eliminating the need for trusted intermediates and another verification process.
Currently, Banks are involving in the global network with scaling and reducing the risk of transaction failure. They would include the necessary obligations, control, and standard with offering the quick and onboarding process that banks use to enable the plug and play into the network for future corridors. The bank creates the engagement with the network to begin exploring how it improves the business and drive the BlockChain with making robust network globally.
Why is BlockChain an ideal solution in the Financial Sector?
According to experts, BlockChain comes with high security, so banks prefer to adopt the change and make millions of transaction which are held on different platforms. Mainly BlockChain is supported by the peer-to-peer network and uses the same mechanism to verify all transaction by creating the unique and permanent audit trail. Moreover, there is no sign or point of failure nor has another way to modify the current transaction record. The technology used behind this is Ethereum, Bitcoin and other cryptocurrencies.
BlockChain works as a decentralized protocol that has the most significant advantage of using centralizing as their alternatives. The BlockChain platforms can require access to all computer system and network with simultaneously to succeed.
How a Fintech industry effort helps in adopting the BlockChain Technology?
To understand the BlockChain technology one need to know the potential of investing a considerable total time and resources to incorporate the technology into their system. It’s a kind of process that results in savings of almost billion dollars. Later these funds are used in clearing the verification process which will effectively be invested in streamlining their business structures by making excellent payment system.
How BlockChain Disrupt Banking Sector?
Currently, BlockChain gives a secure digital transaction to the third party such as banks and other sectors. There are some tools such as smart contracts which promise to automate the tedious process into a simple format. Some of the intermediate level that claims the methods would include below cycle.
- Payment: These eliminate the need of approval transaction between consumers and facilitate faster payment at a lower cost.
- Settlement Systems: It works as a distributed ledger to reduce the operational cost of bringing closer real-time transaction between financial institutions.
- Fundraising: This provides immediate access to liquidity with creating a new model of funding and uses its capital form of traditional bank sector.
- Securities: It comes with various traditional securities along with substitute assets and depending on the structure of the capital market.
- Credit and Loan: With removing the need of the gatekeeper the BlockChain will help in credit and loan industry by providing low-interest rates.'
Ending up, I can conclude by saying that BlockChain technology is a traditional financial infrastructure that makes efficient technology and indeed transform into the banking industry.