Revolutionising of Financial Markets with Blockchain Tech
Since blockchain technology’s popularization in 2008, it has gained immense traction in various industries. In particular, Finance and Capital markets are looking up to blockchain technology as media industry looked up at the internet in the ’90s. Though still in their nascent stages, finance and blockchain industries are complementing each other gracefully. Various features of blockchain, such as immutability, decentralization, and transparency make it appealing to be used in the finance industry.
Talking particularly with regards to banking and finance sectors, millions of dollars worth of funds transfer over a wide range of services and networks. Also, current financial systems essentially depend upon manual networks, which are known to be prone to frauds and errors. Here, blockchain stands out as one of the credible solutions, eagerly waiting to improve the impaired banking systems. According to the Global Fintech Report 2017, 77% of global fintech firms plan to use blockchain in some of their working solutions by 2020.
Blockchain in Finance Sector
While looking up for use cases and in order to support blockchain as a solution in the financial sector, we need to take into consideration various factors such as high level of safety and security, which can be used in banking applications to effectively transfer funds. It also provides a transparent, decentralized architecture, which allows transactions to take place much faster, further decreasing transaction costs. These characteristics make blockchain reliable, promising and in-demand solution for the banking and finance industry.
Banking and financial industries currently serve people and institutions to keep their assets secured and to carry out transactions quickly and error-free. This requires a huge number of mediators, which in turn cause organisations more expenses. Also, a large number of mediators increase the chances of errors and frauds which also might be difficult to track to one person. Here, a blockchain solution can address all of these issues effectively by securing transactions, making customers satisfied, and decreasing associated operational costs.
Advantages of Blockchain in Finance Sector
Implementing blockchain in banking applications need not aim for remaking current solutions, rather the aim should be to improvise current working solutions. Following are some of the key benefits that blockchains provide to capital markets:
- Settlement Time :
Modern-day solutions make it blazing fast for assets to be traded. But, it takes days for them to clear. Blockchain solutions aim at slashing down this time.
- Process Streamlining :
Blockchain solutions provide ways to carry out processes performed across various organisations, being carried out for the same set of data.
- Reduction in Risk :
Legacy banking services pose risks due to uncertainty and un-traceability of operations. Blockchain’s transparent and distributed nature takes care of this.
- Improved Operations :
The way finance and banking sector operations are carried out is heavily dependent on how well the transactions get handled. Blockchains drastically simplify this process, improving operations.
- Reduced Costs :
As discussed earlier, blockchain can take place of several moderators. Thus, reducing costs of operation, decreasing errors, and increasing reliability on the system.
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Revolutionizing of Financial Markets with Blockchain Tech. was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.