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The blockchain is an emerging technology that has put the financial services industry at the rim of transformation by giving way to faster, cheaper, secure, and more transparent business. Banks are considering blockchain as a prospect to develop trust, create transparency, enhance data accuracy, cut transaction cost, and eliminate fraud. All of these aspects are vital in the present business scenario not only from a customer’s point of view but also from the regulator’s standpoint.
The distributed ledger technology was popularized by cryptocurrencies such as Bitcoin. Banks have recognized the business areas of reference data, retail payments, and consumer lending where block chains can help understand the maximum profits associated with time, cost and, risk. Just like any other business, the ROI of the banking industry is a major concern. Companies send about around $150 to $300 trillion every year for payments across national borders, and still, the transfer takes about two to five business days. Likewise, financial institutions at present spend between 60 million dollars and 500 million dollars just to keep up with KYC regulations. To this end, embracing blockchain would be reasonable than going with the existing platforms. Because, blockchain eliminates an. Along with reducing the transaction cost blockchain also provides data integrity by using complex algorithms and consent amid users which ensures that transaction data, once agreed upon, cannot be tampered.
Despite traditionally having been one of the most immune sectors to technological disruption, banking is now more focused around the foreword of technology to restore trust with their customers.