Blockchain technology has brought a dramatic change in the finance sector and how people carry out financial transactions. This innovation has the potential for disrupting the economy, and is currently making a significant impact on global financial services. It is proved to be a game changer as it is one of the most promising technologies, appears to be permanent and is the power behind all the decentralized currencies.
Numerous financial institutions and investors have come forward to support the blockchain technology and believed that blockchain would continue to impact the finance industry.
Blockchain effect on financial services and financial sector:
1. Speed and Accessibility
Numerous banking institutions are making use of this technology to move money. Startup business is assisting these banks to use blockchain technology on an international level. Many startups have been established to make this technology accessible for both banks and financial institutions.
2. Smart Contracts
Smart contracts enable commercial agreements and transactions that are executed automatically. These contracts are secure and reliable as compared to the conventional contracts as it involves only the concerned parties and no intermediary; it also lessens the transaction cost.
3. Potential of Blockchain
Blockchain has gained prominence with its offerings. Various financial institutions are accepting these and exploring blockchain’s possibilities which may further modify the way business transactions are conducted.
4. Eliminating fraudulent activities
Blockchain can eliminate fraudulent activities as it is based on a decentralized system. This implies that it is difficult to hack or attack all the nodes of the blockchain thereby making it a safe and secure medium of transaction.
5. KYC Regulations
Know Your Customer is a crucial aspect for all financial institutions. This regulation helps in identifying customers and minimizes money laundering activities and financial crimes. With implementing blockchain innovation, it will be convenient to identify every customer. This information can be passed on to other financial institutions, and the data gets saved on blockchain and can be used in the future by the banks.
6. Wide range of benefits
Blockchain has always offered a variety of interests. In the coming years ahead, blockchain will provide a more secure and better way of transactions, and connecting without any unfair barriers.
7. Insurance Factor
Smart contracts can also be replaced by legal contracts for investigating claim settlements, premium payments or filing insurance claims. Hence, blockchain will change the manner in which insurance is procured.
