Boundaries explored! That’s the attribute that seems to suit best to the ‘banking Sector’ of the world where the technological potential is calling the shots.
And ‘Blockchain technology is no exception. Thanks to the wide dissemination of this industrial science in the last few years, added with the breathtaking popularity of cryptocurrencies, blockchain technology for banks has turned out to be an open and shut case.
True to the core, there is no denying of the fact that banks stand as the very foundation of a financial system. Yet clients cannot bet their bottom dollar on such institutions when it comes to loyalty. The reason being the frequent scandals that can be attested to banks and only the shoulders of simple clients and the entire economy is there to bear the burden.
However, with the advent of blockchain-based solutions traditional banking has received a major facelift.
Decentralization, transparency, and immutability are some of the magnetic aspects of this technology that makes it a hot favorite among business sectors and banks are no exception.
Blockchain can help financial institutions
The list of blockchain benefits for banks is a never-ending one, yet there are few pointers that need a special mention. For starters, blockchain solutions:
- Allow real-time payments processing on a sanctioned payment network
- Can automate trade process along with payments to increase business transactions speed
- Can enhance operational efficiencies
- Reduce customer risks
- Can glue cryptography and shared databases to provide access to a digital ledger that cannot be changed
From an analyst’s point of view, adapting this technology is nothing short of a lucrative move for banks when it comes to trimming down the processing and transaction costs. This adds up to the list of appealing factors of blockchain technology.
Blockchain can help in certain banking areas
Here is a quick look at how blockchain based solutions can help banking and financial industries turn over new leaf.
Out of all the sectors functioning in the global economy, the financial world is deemed to be the most vulnerable one and more prone to fraudulent endeavors. In a sector where more than 50% of the transactions are in the form of stock exchanges and money transfers, financial crime is a button-down fact. Thanks to blockchain technology for banks, that secures the centralized database systems for banks, which is the primary target for hackers, no more cyber attacks.
Restructuring clearing and settlement
Maintaining the clearing and settlement records for banks that run into billions of dollars is a messy job indeed, especially when it is done by manual reconciliation.
With the help of blockchain for banks, this messy task in-hand can be given a systematic makeover. This will help banks and financial institutions snap out of possible record-keeping complications.
Avoid repetition of the KYC process
Like it or not, financial institutions spend more than $100 million every year on KYC regulations (like identifying and verifying the clients), in a bid to keep money laundering and terrorism at bay. But does money meets its purpose? No! Only with the introduction of blockchain technology for banks can a client be verified by another organization to avoid repetition of the KYC process.
This will also lower administrative costs to staggering levels.
Improve payment process
Introduction of blockchain in the payment process can give it a new look altogether. Not only it will bid farewell to intermediaries in the payment process, but will also reward the organizations with low-cost processing expenses coupled with high security.
Enhanced trading platforms
Financial organizations will witness a humongous change in their trading platforms like minimal operational errors and less number of frauds, with the introduction of blockchain technology.
When it comes to cutting costs and shooting up efficiencies, this technology is a reliable agent. This will also lower administrative costs to staggering levels.
What the future holds in its kitty
The reason Investment Bankers and Financial Analysts swear by blockchain technology for banks is that the list of benefits is far-fetching.
From smooth conducting of transactions, cash management, asset optimization to a plethora of business process that cost more than billions of dollars for banks, this technology has diversified its generous impact everywhere.
It is for this reason that recently Finacle has partnered with R3 to maximize blockchain benefits for banks.
If the banking sector could tap into the potential of this technology in its right sense, the benefits of such a move will sustain for generations.
Riding on the back of this technology- increase in speed, security, efficiency, and minimal costs will add to the pride factor of organizations. If that’s not all, blockchain technology, in all its likelihood, is sure to enhance the quality of service to the end-users several notches up.
Do you too wish to make the most of blockchain based solutions for your organizations and keep up with the changing business environment? Sign Up with SPIN Strategy and witness your dream changing into reality.