Too Lazzzy to Read? Listen to this article👇
“Blockchain is the greatest feature set we can think of for the next decade.”
Indeed, like any new technology, blockchain has gone from being an idea into a buzzword in the marketplace, and now into a real solution with applications in a real commercial environment.
Blockchain is a powerful technology that allows bitcoins, litecoins, dogecoins, and virtual currencies to be open, anonymous, and secure.
The Blockchain wallet is provided by a blockchain software company founded by Peter Smith and Nicholas Carey.
Some of the major blockchain companies:
The banking industry is one of the most vulnerable areas. This requires high security.
Basically, it is a database with a detailed description of each bitcoin transaction. Blockchain has the potential to save banks billions in cash by dramatically reducing processing costs.
Now the question is,
How can blockchain be used in the banking sector?
Blockchain increases the speed of transaction processing. Distributed existence eliminates the need for intermediaries to authorize financial transactions between consumers. This provides a cheaper and easier way to exchange currencies at rates lower than bank fees.
Banks want to seize opportunities to reduce transaction costs and the amount of paper they handle. Blockchain implementation will be a step towards making banks more profitable and valuable.
Know Your Consumer (KYC):
-In banking, the most important thing is to know your consumer. KYC processes require a bank to verify and verify primary documents as part of a due diligence protocol.
– As with blockchain, once the bank receives a new customer and authenticates their identity, the bank can store the KYC document on the blockchain.
– The same KYC documents can be used by other bodies and the person will not need to repeat the same KYC process for a new body.
– Data or blocks added to the chain can never be changed. In this way, the reliability of the data is guaranteed.
Consortium account monitoring:
-The most important application of blockchain technology is to prevent theft.
– Funds intended for end-use will not be tracked by the lender as the borrower is making multiple transactions transferring funds from one bank to another.
– This makes it possible to control the final use of funds if the borrower is financed by a consortium of banks. This leads to a reduction in non-performing assets(NPA).
-Information regarding the movement of funds is available to all members of the group and helps to strengthen the monitoring mechanism.
Raising funds with venture capital is a complex process today.
Blockchain companies are accelerating this process by raising funds with multiple alternatives. To benefit from this model, the project must go through a due diligence process.
There are many other benefits of blockchain implementation in banks:
The main advantage of blockchain is the method of verifying and tracking transactions.
This allows individuals and organizations to process transactions without resorting to the services of third parties or multiple banks. This reduces or even eliminates counterparty risk.
This is safe, once the data is stored in the block, it cannot be changed retroactively.
The elimination of intermediaries allowed processes such as cross-border payments, exchanges, and settlements to become faster, more reliable, and less costly.
It eliminates the risk of errors and duplication and is therefore ideal for updating a range of digital processes.
Some banks using blockchain:
Fifth third bank
Signature bank, etc.
This is the safest way to avoid money laundering and fraudulent promises. Blockchain will expand exponentially in the financial industry in the coming years.
The industry is also exploring the exponential use of blockchain instances.
Blockchain is not the only bitcoin, but there is still a lot to be found.
The future of blockchain:
Blockchain technology has become popular thanks to the successful adoption of cryptocurrencies such as Bitcoin.
In the past year, the blockchain concept began to gain public attention. The pros and cons of blockchain show that it is not as easy as it sounds.
Experts predict blockchain technology will be implemented in various industries and expect the future of blockchain to revolutionize traditional business processes.
However, we can soon expect governments to finally embrace the benefits of blockchain and start using them to improve financial and government services.
By 2020, we will see more examples of successful blockchain technology adoption.
In conclusion, we can say that changing the entire banking system is not an easy task. All the basic functions of banks can be performed through the blockchain in a more convenient and better way.