Blockchain and Financial Services

With the much needed hype around how Blockchain technology will impact the society in general and financial world in particular, there more on the table to discuss about how banks and financial service industry is trying to grapple the situation well and the sense of urgency to use this technology in various streams as much as possible to get the safety aspect well within their ambit. The most challenging situation faced by many commercial banks and retail industry are the frauds and financial data being compromised leading banks to run deep on debts.

Key Areas

  • a lot of potential in the financial service area,
  • investment banking, transaction processing
  • trade financing, insurance, real estates
  • customized technology as it is not like one solution which fits in all
  • sufficient regulation on the legalities of using the technology
  • collaboration between banks and FinTechs to implement it in a broader aspect

In most of the financial service segment third-party outsourced partners are trusted for the processing of most of the high volume of transactions with this technology put in place there will be no third party intermediary, as it is a distributed ledger peer to peer, imagine the amount of duplication which can be avoided and clearing the entire network of a lot of clutter and make it data junk free.

Why blockchain for Financial services?

  • most of the tasks are completed in the intermediary network, hence the requirement for the third party is eliminated, the decentralized ledger is available to all nodes and are available for the public to update and share, the original certificate of ownership being their originally created
  • usage of tokens as units of exchange in the digital space, which cannot be made good as physical money, but can be used for exchange with bitcoins, Ethereum
  • the electronically chained blocks are series of consecutive blocks of information stored and transactions which are entirely linked and data cannot be deleted or tampered with
  • it prevents the double payment system for example if one has to pay $50 for a service they can use the digital exchange medium for the services availed to that person, similarly they need not wait for the clearing of the check via the clearing houses and then transfer the funds to the person, all these are eliminated using this technology which requests the payer bank to transfer the $ 20 to payee bank with the use of private keys to validate the transactions and pay the amount within a very short time and high-level security.

 

 

 

 

 

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