Blockchain Will Bring A Radical Rethink Of Banking

The blockchain is revolutionising the speed and reliability of transactions. While the technology is still in its early stages, it has the potential to benefit a wide variety of industries and sectors, including banking, commerce, healthcare, insurance, and government.

Banking is probably the industry with the most to benefit from integrating blockchain into its operations. The paper-intensive international trade finance system is transformed by blockchain technology into an electronic decentralised ledger that enables all parties involved, including banks, to access a single source of data. They can also use a digital ledger to monitor all records and verify asset ownership in real time.

Furthermore, the blockchain will save banks crores of rupees by dramatically lowering transaction costs. Banks are ecstatic to be able to slash transaction costs and eliminate paper processing. Implementing blockchain technology can help banks become more competitive and valuable.

Key Advantages of inculcating blockchain in the banking infrastructure.

Decentralization:

The primary advantage of blockchain is that it enables individuals and companies to manage transactions without the intervention of a third party or a central bank. Several banks have begun to use the technology as an alternative to systems that rely on third-party transaction validation and intermediaries. Instead of a single central authority overseeing all, blockchain establishes a decentralised infrastructure by distributing power across all transaction chain peers.

Transparency:

When data in a block is saved, it cannot be changed retrospectively, ensuring that the blockchain is inherently stable. Since it is shared by a large number of people and can be accessed by anyone who uses the device, it is difficult to shut down or hack. Since blockchain networks are decentralised, they do not have a single point of failure and can thus withstand attacks more effectively.

Cost-effective:

Using the distributed ledger approach to form a system that decentralises trust, banks can significantly reduce transaction fees by eliminating third-party intermediaries and overhead costs for exchanging money. The elimination of the intermediary allowed procedures like cross-border payments, settlement, and exchange to be done faster, more efficiently, and at a lower cost.

Efficient:

Since blockchain eliminates the risk of duplication and errors, it can be used to update a broad range of digital processes. Settlement and transaction times are reduced to seconds and minutes, respectively, by eliminating intermediaries. It also allows transactions to be processed seven days a week, 24 hours a day. Since blockchain enables banks to store data in blocks in a tamper-proof format, it allows them to increase data agility and speed up KYC procedures.

Key Takeaway

Blockchain was developed as the basis for the virtual currency Bitcoin. It turns out that the technology has a plethora of other uses. With more citizens turning to blockchain councils to study blockchain technology, there is a strong demand for blockchain experts and blockchain platforms. It won't be long before blockchain changes the banking industry as a whole.