December 1, 2020
The big buzz of the tech town blockchain has paved way for many possibilities that could enhance the basic human lifestyle. Banking and financial institutes are nowhere away from enjoying the benefits of blockchain. The ultimate goal of employing this trending technology is to make the financial sector provide better service and more security to customers.
Blockchain has the potential to benefit the banking industry much more than any other technology would offer. Blockchain in financial services handles the secure transaction with reduced errors, let us look deep into the wide benefits it could provide,
By implementing the smart contracts in the platform banking sector can easily eliminate the cost of counterparties and intermediaries. This cut down has made it possible for methods like cross-border payments, trading, and settlement to become faster, more secure, and less expensive. Also, researchers say the blockchain involvement will reduce the infrastructure cost by $20 billion by the end of the year 2022. The contract executing cost, the bank to bank transaction cost everything seems to dissolve by the implementation of blockchain.
The elimination of counterparties and intermediaries reduces the processing time to mere seconds and transactions to minutes. Also, the benefits of blockchain in banking enable transactions to be processed 24/7. The time and efforts taken for KYC have been reduced with blockchain storing data in blocks using a tamper-proof format. And, few reasons for calling blockchain-enabled banking services efficient
– fully automated transactional process
– eradicating the delays caused by the application
– blockchain data is comprehensive, trustworthy, and accurate.
– adding all transactions to a publically available ledger eliminates the problem associated with multiple ledgers.
One of the huge benefits of blockchain in finance service is that the recorded information in the blocks cannot be altered. The decentralized nature of the network reduces the risk of hack and attacks. For every transaction two security keys exist, a public key is available for every user while a private one is shared between the parties governed by strict cryptographic rules.
Smart contract executes only when certain pre-set conditions have been met and this has helped the financial sector a lot to improve the contractual performance.
Blockchain, in general, serves as a layer for the regulators to trace and monitor the status of all the financial products, as a matter of routine, and to get early warnings of potential risks
The data recorded in blockchain is immutable which makes it a key feature for the financial industry. The recorded data can be tracked in real-time, leaving a very detailed audit trail. The reduction in rapprochement and errors improves transparency across the industry.
Currently, banks have started to experiment with multiple blockchain networks cryptocurrencies to evaluate which technical approach offers the best solution for an improved financial industry. Also, the competitive dynamics of blockchain technology in financial sectors have been elaborated by providing information on the hierarchy among the major players operating within it.
The article’s main intention is to bring awareness to the financial sectors to implement blockchain services to get ahead of the upcoming challenges. With a huge number willing to oppose the domination of the bank, combining innovation with the stereotype would help them to play advance in the game.
With a brilliant track record working with the financial sector, Calibraint Technologies would definitely be a great choice for blockchain implementation. Talk To Our Expert Now...