Blockchain in banking sector

1. Blockchainin banking sector https://www.scalablockchain.com/

2. Blockchaintechnology is taking the internet technology and even banking by storm at the present time. • Blockchainis considered as the heartbeat of a financial sector by the world economic forum which indicates that this technology plays a significant role in the financial sector. • Technological revolution changes the banking sector at its best https://www.scalablockchain.com/

3. Banking is one of the prominent sectors to adopt the blockchain technology. • Blockchainis a combination of cryptography and shared database which allows multiple parties to have the transaction simultaneously through a constantly updated digital shared ledger. • It is a kind of technology where the transactions happen in a peer to peer system. https://www.scalablockchain.com/

4. The transaction over a blockchain eliminates the role of a financial institution which presently acts as a mediator for transaction. • It eliminates the chances of fraud even there is no third party to authenticate the transaction of fraud. • Money transaction is definitely the prime function of a financial institution but it is not only the function which a financial institution needs to perform. https://www.scalablockchain.com/

5. Blockchain implementation would not only make the transaction easier but it will make the banking faster and safer in different ways. • There are so many advantages of implementing blockchain in banking and it can be advantageous for both the banks and its customers. https://www.scalablockchain.com/

6. Fraud reduction: • The best thing about blockchain is that it is a decentralised database. It is not like the centralised banking database, the data in the blockchain is saved in a distributed ledger. • In the traditional banking system, the data is saved in a central database which is easy to hack. • Cyber criminals and hackers are well aware of evolving the digital technology and‘ve been able to bypass these security systems and make a data leakage. https://www.scalablockchain.com/

7. In contradiction to that, blockchain is decentralised and it is less prone to this type of fraud. • Banking industry with blockchain makes a real time execution of payments and an absolute transparency would enable real time fraud analysis along with the prevention of the same. https://www.scalablockchain.com/

8. Know your customer (KYC): • The very important thing in the banking industry is know your customer. KYC processes requires the banks to validate and verify primary documents as a part of the due diligence protocol. • As per the blockchain, once a bank receives a new customer and authenticate his identity, the bank can save the KYC document in a blockchain. • The same KYC documents can be used by other authorities and the person would not be needed to repeat the same process of KYC for a new authority. • The data or the blocks added in a chain can never be tempered. So the authenticity of the data is an assured thing. https://www.scalablockchain.com/

9. Cheaper and secure payments: • Blockchainis a faster, safer and cheaper alternative to bank payments. It eliminates the need to rely on the intermediary like bank to approve the transaction. • When a third party like a bank comes to a picture, it takes a transaction fee from both the sender and receiver. • Previously, one needs to pay a higher charge for the transaction and the processing fee and also you need to follow certain rules and regulations which are set by the financial institutions. https://www.scalablockchain.com/

10. When a transaction is done through blockchain, it makes you get rid of all those issues. • Blockchain provides peer to peer payments where no intermediaries are required hence one need to bear a low transaction fee. • This technology provides cheap, fast and borderless payments across the world. https://www.scalablockchain.com/

11. Trading platforms: • If a bank starts using a blockchain for trading, the whole process will become much faster and secured. • Blockchain offers a new medium to exchange the assets without centralized trusts or intermediaries which are free from the risk of double spending. • Blockchain will minimise the operational risk as all the transactions are transparent and immutable. The record of transaction will be there permanently and can be used for future reference. https://www.scalablockchain.com/

12. Monitoring of consortium accounts: • The most important application of blockchain technology is to prevent the diversion of funds. • The funds which are at end use will not be tracked by the lender as the borrower makes multiple transactions in moving funds from one bank to another. • It helps monitoring the end use of funds of a borrower funded by a consortium of banks. It leads to the reduction in Non-Performing Assets (NPA) as the banks can have an eye on the end use of the funds. • The information which are related to a movement of funds is made available to all group members and it helps strengthening the monitoring mechanism. https://www.scalablockchain.com/

13. Fast paced financial transaction: • Most of the third party transactions in the banking industry consume lot of time; this may range from few days to even weeks. • These transactions are taking place via payment gateways that can be better replaced with blockchain technology. • It offers a opportunity for a real time payment solutions. The blockchain takes only a few seconds to complete the transactions. • This would eliminate the third party payment gateways and results in fast paced financial transactions. https://www.scalablockchain.com/

14. Loans and credit: • Blockchaincan be used for loans and credits in two different ways. The very first use of a blockchain in the lending industry is that a lender can check the credit worthiness of a potential borrower through a blockchain. • Before the lending process, the lender checks the credit score, income to debt ratio etc for which they need to depend on the credit bureaus like trans-union or CIBIL. • Those credit bureaus save the data in a centralized database which is vulnerable to get hacker and this would have a direct effect on the creditworthiness of an individual. • In order to resolve this issue, banks can use the blockchain to avail the authenticate data about a potential borrower. https://www.scalablockchain.com/

15. The other use of blockchain is that with the help of a blockchain a loan seeker can avail a loan through peer to peer lending. In this method of lending, the lender is just another person instead of a lending institution who can check the credit worthiness of the loan seeker through the blockchain and provide a loan. https://www.scalablockchain.com/

16. Final thoughts: • It is undeniable that banking industry is appreciating this blockchain technology but implementing the same in a day to day function of bank is a matter of serious concern. • Changing the whole banking system is not an easy task. All the major functions of banks can be performed through blockchain in a more convenient and a better way. https://www.scalablockchain.com/

17. Blockchainbrings more transformation in the banking sector since it has the potential to disrupt the traditional business models and makes it obsolete. • This way would help reduces the time, effort and cost in interbank transactions. • Scalablockchain offer a products and solutions for a blockchain related projects. The excellent support will be provided by the highly skilled experts of blockchain. For more blockchain related information and queries -> Click here. https://www.scalablockchain.com/