In the ongoing transformation of the banking and financial services sectors, how is blockchain revolutionize and making its mark?
As per a prominent industry portal, 40% of Americans have refrained from visiting either a credit union or a bank in the last six months.
This information may not be entirely unexpected. The narrative has shifted, acknowledging that traditional banks are no longer indispensable for financial management. However, this doesn’t imply their disappearance.
Seizing this opportunity, open banking is influencing both consumers and businesses, reshaping the landscape, and fostering the potential for innovative products.
Farewell to traditional banking; enter blockchain
Beyond normal banking, numerous entities now offer lending, saving, and investment solutions that are more accessible, cost-effective, and expeditious than those provided by financial giants.
The key to this transformation is the introduction of blockchain revolutionize. While hurdles must be surmounted before blockchain assumes a dominant role in banking and financial services.
The allure of potential labor and cost savings has led financial institutions to invest substantial sums in dedicated resources for comprehensive research and implementation.
How To Progress Made?
The lockchain revolutionize has progressively permeated the payment sphere, inducing a metamorphosis in transaction dynamics. It has achieved this by:
- Eradicating corruption and enhancing efficiency and simplicity through the establishment of novel financial processes and service infrastructure.
- Facilitating the influx of liquid capital via smart contracts, enabling participants to convert fiat currencies to support foreign exchange.
- Catalyzing real-time cross-border payments.
Distributed ledger technology (DLT)
Simultaneously, distributed ledger technology (DLT), synonymous with blockchain, has made small transactions economically viable, eliminating the need for extensive manual intervention. This makes broker involvement obsolete and reduces processing time.
The transformative potential of this technology has not escaped the notice of established institutions and newcomers, as shown by the property and casualty (P&C) insurance sector.
Traditionally reliant on third parties for risk, asset, and loss data in underwriting, the insurance sector grapples with manual data collection and claim submission, fostering the risk of rework and fraud. DLT intervention, through smart contracts, streamlines these processes, relieving loss adjustors from meticulous claim scrutiny.
Why is this helpful?
Within the trade finance domain, DLT has the potential to elevate the efficiency of export and import operations by simplifying access to trade-related documents, expediting settlement, and enhancing capital efficiency.
Even post-trade activities stand to benefit, with smart contracts minimizing counterparties, obviating the need for intermediaries, and expediting settlement procedures.
Bottomline
DLT, or blockchain, appears poised to unlock avenues for substantial cost reduction. It not only promises to enhance the customer journey but also facilitates a more secure form of data transaction and identity verification. While the adoption of open banking by major banks may initially be a challenging process, it is an inevitable development and be the part of blockchain revolutionize.
Also Read :
- 5 Best Personal Finance Apps
- How To Buy Government Bonds
- What is a Pooh Pathology Test? What’s Your Pooh Pathology?
About The Author
