One tech that comes to mind whenever there’s an ongoing debate on using a secure framework is blockchain technology. After gaining massive popularity amongst industries, it has become a go-to option for businesses to adopt the tech and relish its ease of access.
Initially, blockchain tech was developed with the purpose of utilizing cryptocurrencies; however, it has raised high above that. Undoubtedly, tech has impacted all industries, but the most popular domain that uses blockchain is the banking and finance sector.
Why?
Well, the blockchain is known for its transparency and security. It delivers two-way convenience! On one hand, people want to deposit their money in a safe environment, and on the other, banks seek to provide higher security for increased customer loyalty.
Blockchain-tech is on the way to revolutionize the working of banks and other financial institutions. As more companies realize the power of blockchain-based tech, more will the framework be adopted and soon will become the most common mechanism worldwide.
Are you a part of the banking and finance sector, and looking forward to changing the way your institution operates?
This is just the right place you’ve landed on, as below mentioned are the most popular methods of how financial institutions are using the blockchain tech for an improved business experience.
Use Cases of Blockchain Tech in Banking and Finance Industry
- Identification and KYC
Nobody expects that their money will go into the wrong hands or get stolen. Therefore, identity verification has a massive role to play in banking.
As per the traditional methods, the authentication process involved a lot of paperwork that lacked efficiency. However, the modern blockchain-based technique has cut down the need for unnecessary steps, as once registered, repeated verification isn’t required.
Know Your Customer (KYC) is another mechanism that is highly beneficial due to the application of blockchain. Earlier, the authorization process for new customers was time-consuming, but now with the help of blockchain, customer databases can be automatically updated. Furthermore, it enables secure information exchange.
- Payments
Payments are one of the most popular use cases that is exactly at the same pace as blockchain development. Notably, it is one of the primary reasons people use e-banking. Therefore, numerous banks have inclined towards adopting blockchain for payments and offering digital currencies.
Handling payments using blockchain-based tech initiates faster and safer transactions. Not only this, but the banks no more hold transactions for the next day, instead real-time actions take place.
- Money Transfer
Money transfer is a straightforward phenomenon that involves transferring money from one’s bank account to another via internet banking.
There are a few applications that enable money transfer activities, but also pose a question for the users if their money will be safely transacted or not.
However, blockchain tech is a great answer for security issues and limitations.
- Information Storage and Exchange
Undoubtedly, banks store a lot of sensitive information that can not be put at stake. Therefore, it requires an efficient security solution, which can be offered by none other than blockchain. Keeping up with the digital world, most financial institutions have already integrated tech into their business, diminishing paperwork.
Blockchain technology is a perfect solution when it comes to banking because of its decentralized pattern and encryption of information, exactly what is required in the banking sector.
- Trade Transactions
Commercial and international exchanges are what the trade finance sector does. Therefore, such sectors encourage a lot of paperwork when buyers and sellers communicate with third parties, including export credit agencies.
Fortunately, blockchain cuts down the need for such mediators, making it an efficient record-keeping process. Generally, every party is expected to maintain the documents of the trade, but with the emerging tech, only a one-time digital file has to be maintained. It is essential to mention that information can be modified time-to-time.
Should You Invest in Blockchain Technology?
Are you still stuck with traditional banking mechanisms? Well, not anymore because blockchain has got to offer everything an industry like banking and finance would require. It is a highly secure, decentralized, and transparent tech, which will save you resources, time, and money.
Undoubtedly, blockchain is a powerful technology concept, which is likely to replace traditional banks and will become the future of the banking and finance sector.
Involved in a business that demands a huge amount of transfers? Wait no more and connect with the professionals for further insights on adopting blockchain technology.
