There are several areas where firms can use the blockchain in financial services. Blockchain technology is not limited to the bitcoin and Ethereum; it can improve the entire processing of the financial services industry in a highly secure, decentralized and transparent manner.
Being the decentralized ledger, the blockchain could offer finance firms an effective and secure way to handle a complete range of transactions, with use cases like securities, derivatives, trade finance, settlement, payments, syndicate lending and many other.
This article aims to spread awareness within the financial community to enhance interest in the blockchain technology.
Let’s understand what could be the possible Use Cases of the Blockchain in finance.
The payment transfer across the overseas has always been a slow and costly process. If Alex who lives in the USA wants to transfer the money across the borders to his family who has their account in the local bank will take a lot of time and money to complete this entire process. But, the blockchain technology can speed up and simplify the process while eliminating the middlemen. The blockchain can provide the guaranteed real-time transaction across-borders while reducing the cost.
The automation in the transactions is crucial for the financial services industry. The use of smart Contracts in the blockchain could automate workflows and calculations while reducing processing time and number of errors due to human intervention.
Know Your Customer (KYC)-
Compliance and KYC procedures have become immensely crucial in the financial industries. By building the KYC process on the top of the blockchain technology, banks could not only benefit with reduced operational costs but also enhance the efficiency of the compliance process.
Mostly banking solutions are based on a centralized database that is vulnerable to cyber attack due to having the single point of failure. The distributed ledger, where each block contains a timestamp and hold individual’s transaction batches with a link to a previous block can help in reducing frauds. Undoubtedly, the blockchain technology would eradicate the current cyber-crimes happening in the financial institutes.
Voters with the help of the blockchain technology can track the record stored on the blockchain related to public funds received and paid by the political parties. This can help voters to make better decisions at the time of elections.
In today’s era, the stock market includes entities like brokers, regulators and stock exchange, which is increasing the system cost. The blockchain technology in the most beneficial way can be used in stock exchange by speeding up the settlements of the trades. The decentralized approach could make stock exchanges much more efficient while eliminating the intermediaries by using Smart Contracts.
The blockchain technology can revolutionize the government, society and even companies for the better. Moreover, investors can also find the right companies profering better investment opportunities.
Connect with the blockchain development company that understands the advanced concepts of the technology and can build the blockchain-based applications for the finance sector.