To start simpler, let’s say marriage between finance and technology is called ‘Fintech’.
Blockchain technology benefits so many areas including so many fields beyond our expectations and in the segment today we will talk about blockchain and its advantages in the finance industry. Let’s begin with its services.
WHAT TECHNOLOGY WILL BRING TO FINANCIAL INSTRUMENTS.
– Economic benefits
– Labor and time-saving processes
– Computable capabilities.
Implementation of blockchain in finance could get to the following extents.
TRUST AND INTEGRITY.
A major element of the business is “trading” and trading activities depend on trust and reliability. Gaining the trust of the customer can take you to places, hence some financial strategies, and here you have successfully gained the trust that you need in the business. Blockchain can ensure that your client gets all the privacy they need. It also allows the bank to trust clients in cases such as taking a loan. Bank can determine the user based on their credit status, their borrow and repayment history, and other such details.
SECURITY AND CONFIDENTIALITY.
Making sure that providing next-level security is a big deal. Biometric authentication, a synthesis of passwords, personal identifier removal, and particularized access command, are the aspects that make blockchain a trustworthy and securer platform to work on.
Blockchain can make settlements user optimized giving both parties a noteworthy amount of time and money. Usually, through traditional banking, settlements take almost a week or more but with blockchain, it can be in a blink of an eye.
Financial organizations can be more transparent than before making clients easy and comfortable. By necessary encryption and control mechanisms, blockchain creates transparency for users.
LESSER ERROR HANDLING.
Hence blockchain is a very tamper-proof and immutable platform for any data recorded, so it can be traced whenever you want to without any difficulty. This way it puts an end to reconciliation.
‘SMART CONTRACT’ COMES IN HANDY.
Blockchain enables the use of smart contracts within banks, and these smart contracts allow companies to uncomplicate the process of identity verification. It can make data visible on a decentralized network. For example, claiming, verifying, and processing insurance has always been a labor-intensive task that irritates your customers.
Giving all finance authorities to the blockchain can digitize the entire trade finance situation with doubled security and efficiency. It can turn on more transparent governance, lower capital requirements, lesser processing times, and reduced risks of fraud and human error.
Counterparty risks happen when there are delayed settlements but it will no longer be a problem when transactions are made instantly.