How is blockchain revolutionizing banking

Posted by codingp on February 14th, 2020

A blockchain is a peer-to-peer network of computers or servers known as “nodes” that both participate and monitor the transfer of information and assets. Every transfer is recorded on each user’s computer (node), generating a platform of trust based on several identical copies of the ledger.

Cryptocurrencies and information can be shared through blockchain technology, the need for the third party is removed through smart contracts which is a product of blockchain.

A per Blockchain Development Company: Blockchain implementation improves efficiency, security, and reliability for countless industries, in which banking is one of them.

Where Blockchain can provide services in Banks; an overview

• Retail banking & cards
• Mortgages
• Loyalty Points
• On-boarding
• Insurance – P&C and Life
• Smart contracts
• Fraud insurance claims reduction
• Asset Management
• Settlement Process
• Transfer Agency
• Investment Banking
• Delivery vs Payments
• OTC Markets
• Corporate Banking
• Cross-border payments
• Supply Chain Finance

influence of blockchain the banking sector

traditionally the processes in banking involve a lot of manual processes and mediators to perform the necessary function, making systems more costly, complex and open to errors. that is where blockchain jumps in, providing security, transparency and reducing the risk of data error.

blockchain provides document management, quality identity protection and guarantees the constancy of the published customer documents. also providing the ability to modernize communication with the customers.

Transactions History

a key benefit of blockchain is immutable transaction history. Transactions cannot be edited or removed, which saves the systems form errors and crimes that might take place in the banking sector.

fast and easy transactions

blockchain improves the speed of transaction processing. since its distributive in nature, which removes the need for intermediate approval from the customers and makes the transactions easy and less time-consuming.

Reduced Costs

it reduces operating costs and gives customers an opportunity customer to directly access their information, which brings customers close to the banks in real-time. by ensuring that that payment and settlements are taking place simultaneously, the management cost is also reduced by the treasury.

Smart Contracts

smart contracts ensure improved data quality and eliminate the need of the third party in the agreements/contracts. It allows the storage of any kind of digital information which can be modified only in accordance with a set of predefined rules.

Data Integrity

blockchain allows storing information in one place that is secure and guarantees the integrity and non-repudiation of the stored data. the data stores in blockchain cannot be changed which eliminates the data duplication and helps the organization maintain a clean record.

Loans and Credit

blockchain can make it easier and safer to borrow money and provide lower interest rates because it eliminates the need of the third party in the loan and credit industry.

Security

blockchain has the ability to create effective and interoperable capital markets by tokenizing traditional securities such as stocks, bonds, and alternative assets and making them public.

Privacy

banks are one of the major industries that are entirely based on trust, people trusting them and that should be maintained. blockchain technology brings the feature of security and privacy with it. it makes sure the data stored isn't changed and whether it's going to be public or private.

To be said again, the blockchain industry is much more than Bitcoin or cryptocurrencies.  The tamper-proof, decentralized, immutable nature of the blockchain makes it ideal for reducing costs and streamlining everything from payments, asset trading, securities issuance, retail banking, and clearing and settlements.