Blockchain is one of the most sought-after technologies that is used in the banking landscape, and the reasons are many to its credit. Indeed, this very technology has brought disruption to the financial industry, enabling every single transaction made to be verified and approved by all participants in the exchange, and then it becomes part of the chain. This removes the clutter of any unnecessary disturbance or calls off any dispute to occur later.
This very technology is and will continue bringing a great set of opportunities in the FinTech sector, but something that cannot be missed mentioning here is its ability to tackle highly regulated areas.
The digitalization of the banking sector is on the boom and will continue serving the best to the customers in the future as well. But there are few out there who still need a fact-bullet to fathom how far this tech trend is helping the banking sector.
Henceforth, to help you all understand the nitty-gritty involved in the blockchain for the betterment of the banking sector, we have brought this post today, so you can glean insights about the bucket of advantages, it has got to offer.
Blockchain and the banking sector
Well, this combo is popular and has given a new and valid direction to the banking field. The number of threats or the risks involved in the areas of banking is not unbeknown to any. And the mere inclusion of this technology is helping to control operational risk and administrative costs while making every function transparent and immutable.
But there is much more than meets the eyes, and this is where this post will help you to understand its reasonability and efficiency in detail. Just scroll it further…
This is more a concern with every banking facility, that leaves customers always panic, what if their details are mismanaged or their data is compromised. As the growth of technology has also led to an improved cyber-attack, which means banks need to pay more attention to their security hacks.
Here, the inclusion of Blockchain in their business model shuts down the hackers and ensures to prevail a decentralized network that is hard to be invaded for any type of unwanted activities. The security with the Blockchain can be experienced at another level, leaving no use of relying on the public as well as private decryption codes.
Lower transaction fees
For a customer, one of the most disturbing facts is to pay extra transaction fees, since there are different parties involved in the cross border or usual transaction process. With the help of Blockchain integration in their model, banks can build a system that decentralizes trust, and as a consequence, it decreases transaction fees.
No third- party involvement
Over the years the traditional banking system has given a strong boost to the third-party services’ involvement, which has further created a ruckus for the customers and the banks as well. It involved extra transaction fees, security glitches, and a lengthy process to name a few.
However, when it comes to Blockchain the process of verifying and tracking transactions is not done by any third party or individual, but this technology is based on the decentralized system, to give a reliable alternative to offer a single authority control. This eliminates the risk, cost, and invasion of data theft from the banking system.
Do you know what is the worst challenge faced by the banking sector today?
Yes, that is the growth of fraud and cyber-attacks. Since traditional banks imbibe the centralized database, which makes their model to be prone to hackers and cyber-attacks as all the information is located in one place.
On the flip side, when you take a look at the evolving digital technology like Blockchain, then you would be surprised to know, it reduces fraud attacks as it is decentralized. It helps banks to provide the real-time execution of payments and give clear transparency to check real-time fraud analysis and prevention.
KYC with no hassle involved
KYC is a MUST process that needs to be carried out within every banking service. However, you must know that this process consumes too much time and even causes delays in banking transactions. No prize for guessing but this irks customers and for banks to accomplish this process the cost involved is higher.
With the Blockchain this process turns out to be a super-smooth journey, leaving no stone unturned to curtail the lengthening process and increase the positive customer experience at large.
There are various jobs in the banking sector that are repeated every day and hour to complete a certain process, and that takes time and lessens the efficiency. However, with the Blockchain, it becomes easy to eradicate the risk of errors and duplication. Further, the no involvement of third-party ensures to complete the transaction faster and with no extra commission given.
Will Blockchain drive the future of banking?
Well, the economic theory has predicted how a low-cost competitor can take advantages when high-cost competitors are still involved in the market. And with the Blockchain, the market competition in the banking sector will keep on evolving, rather than staying at a stagnant approach.
It is very likely that Blockchain shall surpass the financial transactions, in a way it is handling at the moment and will offer a new funnel to explore financial technologies to bring more transparency.
Henceforth, it is quite justified to mention that Blockchain will revolutionize the future of banking, though how and when it will be done, this time will tell better.
Looking at the large landscape of Blockchain technology, it is very obvious to see a large number of banks especially the major banks on the global platform to come forward and invest in this very promising tech trend. However, on the other hand, we cannot deny the fact, Blockchain capabilities are not limited to the financial sector, but a wide variety of businesses are investing and taking benefits out of it.
The numerous cases of Blockchain are likely to get further improvements in the near future, as this technology is on the run of improving its functionalities. It is hard to predict what will be the future of Blockchain, but one thing is very certain that it will be filled with ease, convenience, and extreme tech advancement.
We will keep bringing you advancing steps being taken in this very tech domain, so stay hooked to this space for more enthralling information to come your way.