Blockchain is the current favourite of several industries. Especially the finance industry especially is utilising it really well.
Why not?
It has the potential to completely evolve the conventional system. Humans are the smartest creatures on this planet. So, we have to come up with smarter solutions. When we have a smarter solution, it is also a must to use that properly.
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We are doing so; we are trying hard to utilise the whole potential of the amazing Blockchain technology. Due to this very reason, more and more people are also getting interested in the Crypto space, Blockchain and investing their money.
If you are also thinking about checking out the Crypto space, you can start your journey with the bitcoin buyer. You just need to have a proper understanding and knowledge of the Crypto market.
You might become over-excited when you get to know that Blockchain technology is evolving the financial space. Here. We will talk about that.
Blockchain Is Changing The Banking Industry
In recent years the financial industry has changed a lot. A part of that credit goes to Blockchain. Blockchain lets untrusted parties agree on the state of a specific database and also not have to rely on any middleman for any type of transaction.
The ledger is not at all administered by anybody.
This amazing technology will offer financial services such as payments without using any middle party, like a bank. Blockchain creates a decentralised solution that can make it super easier for banks to focus on a number of other activities apart from just tracking payment transactions.
Blockchain technology has changed banking in several ways. Whether it is payments, fundraising, settlement systems, securities management, credit, trade finance, and loans, it has reshaped everything.
Blockchain is offering us faster payments, and that too in lower transaction fees than banks. All credit goes to the decentralisation ledger.
Blockchain has also impacted the settlement and clearance systems, where the distributed ledger has also mitigated the costs of operations along with bringing more real-time transactions among financial institutions.
Now comes the fundraising part, that also has changed by holding the hands of ICOs or Initial Coin Offerings, which is also a practical product of Blockchain. A completely new model of financing is capable of unbundling access to capital from capital-raising firms and services.
When it comes to securities like bonds, stocks, and other alternative assets, we like to mention that they are also placed on public Blockchains. It actually develops more efficient capital markets.
By eliminating the requirements of gatekeepers and middlemen, Blockchain has changed the credit and loan industry a lot. Borrowing money has become more secure, along with much lower interest rates. Blockchain also has replaced paper-heavy finance trading.
Blockchain has created more security, trust, and transparency among trade parties across the globe.
Benefits Of Blockchain In the Banking Sector
Now, we will talk about the major benefits that Blockchain is offering to the banking sector.
Benefit No. 1: Reduced Costs
Obviously!
In the above part, we have already mentioned that Blockchain always comes with lower transaction fees by eliminating third parties.
Benefit No. 2: Faster Transactions
In comparison to conventional transaction systems, Blockchain ensures the transaction is being processed a lot faster. It has also reduced international transaction time considerably.
Benefit No. 3: Improved Data Quality
The main purpose of Blockchain is to store data in the Blocks. Modern BLockchain is also capable of storing any type of data and also allows it to be accessed following some rules and regulations.
The smart contracts technology automatically verifies and enforces contracts.
Benefit No. 4: Improved Security
With BLockchain technology, banks can secure transaction information in a better way. With two security keys- public keys and private keys, Blockchain reduces the risk of someone else diverting the payments or capturing transaction information.
Benefit No. 5: Accountability
With the accountability of Blockchain, banks are now reducing fraud and misuse of company assets. Also, when the transactions are generated digitally, banks do not need to worry about major errors being made.
Benefit No. 6: Compliance
With Blockchain, banks can allow auditors and also government officials to access the Blockchain network. This way, those bodies will be able to see business unfold with complete transparency.
