Banking as we know it is going through one of the most revolutionary and world-breaking changes it has ever been through, and it’s all thanks to blockchain technology. Of course, blockchain technology first came into the mainstream when Bitcoin exploded in value almost a decade ago, but the technology has come a very long way since then.
With more people, businesses, and services now implementing blockchain technology and using
cryptocurrencies, traditional banking systems are struggling to keep up with
the change. In most cases, these banks will either have to implement and
integrate blockchain into their services or be left behind.
To give you
an idea of how blockchain technology is both disrupting and enhancing the
banking industry, here are the changes you need to know about.
1 Making payment across borders
Making
payments across the globe using traditional systems and methods has always been
an incredibly slow process. Sure, companies like Visa and plenty of banks are
trying to make this a faster process while ensuring the transfers remain secure
and protected, but with the speed and fast pace of the modern world, it’s nowhere
near where it needs to be.
2 Enhanced security features
Hand’s down,
the best feature of blockchain technology is the levels of security it provides
its users. This is one of the top reasons why people choose to implement this
technology into their own lives and businesses. Around 71% of experts claim
that blockchain technology is more secure than traditional banking services.
3 Blockchain in fundraising
Nowadays,
banks are very reluctant to give out money to new start-up businesses since the
financial collapse, and now acquiring funding on potentially risking projects
is difficult. However, whereas banks have usually always held the purse
strings, blockchain is taking its place.
4 Conducting credit checks
When you
take out any form of lending money from a bank, whether that’s in the form of a
loan, credit card, mortgage, etc., everybody is subject to a credit check that
will determine your validity for receiving the loan in the first place, and
usually what kind of interest rates you’re going to be subject too.
5 Blockchain in share trading
Of course,
anywhere where money is involved, you have to think about the impact on the
stocks and shares industry. Sharing trades usually involve several third-party
entities, such as CSD’s and brokers, which means trading shares can be lengthy.
However, blockchain takes away all these traditional issues.
6 Financing trade ventures
The trade
financing industry is lengthy. It involves a lot of paperwork, such as bills
and invoices, which means everyone involved must keep a record of everything
that’s going on, and all documentation must be matching for everyone involved.
Again, this is incredibly time-consuming.
7 Implementing smart contracts
Smart
contracts are becoming increasingly used throughout the world in modern-day
business and refer to everything, from deposit-making and lending to compliance
checking and remittances.
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