Doesn’t it look similar? Yes! Each of these concepts is similar in one or the other way. Blockchain is more than a digital database that can record transactions of Bitcoin. Even though many countries hesitate to accept the cryptocurrencies as a legal asset, they couldn’t deny the viable applications of blockchain technology.
Cryptocurrencies are just an application of blockchain, but it can help every sector in the world to achieve salient features. Fintech industry is the major sector that can bring up changes in every sector indirectly. So, implementing blockchain in financial services can help other sectors believe in the potential of this DLT.
In this post, let’s understand what blockchain is, its benefits to the industrial process and the major areas of financial services at which it can impact!
What is blockchain? A simple snippet!
Let’s get back to our school days! We can view our syllabus, results in a public portal. Answer papers become inaccessible for us, whereas only the subject teachers who are assessing the papers can access them.
The entire school database contains information about your students, staff, salary, accounts, food, electrical, expenses, and much more data. But, only principal and authorized staff can access the entire database, whereas students can view only their personal info and generic syllabus, results, school achievements.
You can now easily connect blockchain in your life!
Blockchain is a distributed digital ledger or database of transactions or data stored in sequential order. Data once recorded in blockchain is immutable and the transactions or modifications are approved by the certain authorized network people through proof-of-work.
Blockchain is categorized into three major categories: Public, Private, Consortium(Hybrid). You may think blockchain is similar to a database, but its features are much more.
Now, let’s understand the benefits of implementing blockchain in various sectors.
Benefits of blockchain in industrial solutions
Integrating blockchain tech solutions for the existing industrial processes can bag a bundle of benefits. Some of them are listed here!
- Automated Smart Contracts,
- Verified data or transactions,
- No reconciliation required,
- Devoid of human error,
- Protects from single-point failure,
- Peer-to-peer transactions,
- Consensus mechanism,
- Negotiable inter charges,
- Timeless transactions,
- Immense trackability,
- No intermediaries.
Sure, blockchain is still being excavated by blockchain developers and the crypto community to enlarge this list of benefits. Various industries are analyzing the possible ways to implement end-to-end blockchain ecosystems. Hereby, let’s get deeper into the major impacts of blockchain for financial processes!
5 Major utilities of blockchain in financial services
Blockchain in financial services can save millions for banking industries by decentralizing customer information. Every year around millions is spent in verifying the customer reputation by bankers. A separate team is employed at the back-end of every bank to check the customer information. Instead, decentralizing the verified customer data in the blockchain network can help other banks save efforts, time and money.
Insurance is the giant fintech sector involving payments, claims, and recoveries. For every process, they require verification or detailed investigation of situations with proofs. Decentralizing the insurance sector with agents or inspectors at their own locality can help the authorities process claims with no time and effort. Insurance plans and natural calamity deals are detailed with smart contract applications of the blockchain platform.
Automated contracts & settlements
Fintech industry is bundled with deals, agreements, contracts of employees, loans and other claims. Detailing every basic of the deal through self-operating smart contract protocols can help achieve a conflict-free financial ecosystem. With dispute-free deals, civil cases can be negotiated in the future.
Medium, small enterprises face a lot of transaction issues in global payments due to inter charges, higher processing time and intermediaries. Blockchain incorporated the financial sector can overcome the pits in traditional banking for cross-border payments.
The decentralized, peer-to-peer trading with blockchain financial services can cut-off inter transaction fees, processing time and fluctuations. The transparent financial sector can pave the way for margin trading, accurate share prices, and many more aspects.
Blockchain is here to disrupt the world! None of the sectors can escape from incorporating blockchain solutions. As of now, since the blockchain community is exploring possible ways to fulfill the enterprise needs, they pass by hurdles. Sure, tech enthusiasts would overcome these obstacles and achieve a legendary, legitimate process.
To implement end-to-end blockchain financial solutions, reach our Blockchain Firm technical experts through live chat or telegram!