The twenty-first century has been overflowing with diverse innovations in multiple industries, including the financial department. Technologies implemented in daily activities of entities across the globe have become an integral component of many operations. Processes requiring human hands, massive machines and paper currency are no longer popular in today’s digitalized world.
The financial sector is not left behind – the appearance of e-banking, stock markets, e-commerce platforms, digital payments systems and other tools bringing day-to-day tasks online has made the industry one of the quickest growing on the market. Internet connection is the only instrument needed to benefit from the countless finance applications created for both business and personal use.
“Staying relevant” is the most-used slogan adopted by the majority of the businesses looking to boost their competitive advantage. By applying various technologies to their practice, they increase their chances of obtaining profits and ultimately standing out in the crowd. What has intensified the financial revolution the most is the emergence of the decentralized ledger called blockchain.
The concept behind the blockchain technology is simple – the platform keeps the record of all data exchanges in immutable blocks accessible by those connected to them. The mechanism is designed to let information be distributed across computer nodes but not copied. The cryptographic feature embedded in the system does not permit the interference of an unintended third party attempting to get access to it.
The potential of the decentralized ledger transforming the financial industry is huge. Ranging from significantly cutting down costs to reducing the unnecessary bureaucracy in traditional banking, fintech has the power to better banking experience for financial institutions and customers alike.
Business transactions are bound to encounter major changes, including:
- The elimination of fraud
Due to the decentralized nature of blockchain, the stored on the platform data is not prone to cyber attacks. The absence of intermediaries combined with the implanted transparency simplifies financial activities thus providing the higher rate of security.
- The implementation of smart contracts
Automated agreements with predefined terms and conditions decrease the costs associated with transactions. On top of that, smart contracts ensure a more efficient investigation of claim settlements and other insurance related processes.
- The establishment of KYC regulations
The Know Your Customer is vital for financial institutions regulation enabling them to identify their customers. As a result, the money laundering is minimized and financial crimes occur less.
Taking into consideration the myriad benefits blockchain provides for the financial industry, there is no doubt in the technology’s potential domination in the nearest future. The customers’ increased faith in the banking system will greatly affect the latter’s performance rates for the better.
With the continuous evolvement of the fintech, Blockchain App Factory intends to provide you with the latest solutions designed to meet your financial needs – be it the issuance of digital insurance or the development of an open banking system. Their skilled blockchain developers have expertise in risk, strategy, legal compliance and tax departments coupled with unparalleled competency to develop the best strategies for a variety of cases.