The growth of blockchain and cryptocurrency has been so rapid. Blockchain technology and the cryptocurrencies have today become a parallel platform. Where people started performing standard transactions. As we all know for financial management banks are no longer critical. This in no way means that banks are disappearing. Advantage of this situation, open banking is contributing both the impact it has on consumers and businesses and the value of the products that could develop. Blockchain technology brings a system that is not resting on paper and other slow processes. The technology is enough to stand against fraud. There are too many intercessors that exist in the banking industry. This is not the case with blockchain. The world is already passed to digital platforms. It is only reasonable that the blockchain technology plays a central role when it comes up with providing financial services to customers. Blockchain technology brings a whole world of digital possibilities. Quick evolution and convenience are some of the things that will specify the financial industry with blockchain. According to a PwC report, 24% of financial executives from throughout the world are very familiar with blockchain technology. Observing the far-reaching implications of the technology. Companies are researching to find out the ways of applying blockchain in many sectors.
We will start this blog by understanding how blockchain is revolutionizing in the banking sector and financial markets.
Any existing system will have some issues. Let us look at some of the most often faced issues with the Banking system.
- Double spending
- Net frauds and account hacking
- The financial crisis and crashes
Some of the technique through which the Blockchain technology tackles the above-mentioned issues:
The Blockchain system follows a decentralized approach when compared with banks and financial organizations. which controlled and governed by Central or Federal Authorities. Here, everyone who is part of the system becomes responsible for the growth and downfall of the system. Rather than one single entity holding the power, everyone who is elaborate with the system holds some power.
The ledger holds the details of all transactions which is happening on the Blockchain is open and accessible to everyone who connected with the system. Once you join the Blockchain network, then you can download the whole list of the transaction since its initiation. Even though the complete ledger is publicly accessible. The details of the people involved in the transactions remain completely anonymous.
Verification of Every Individual Transaction
Every single transaction verified by cross-checking in the ledger of the transaction. The validation signal sent after a few minutes. Through the usage of several complex hashing algorithm and encryption, the issue of double spending eliminated.
This unique technology offers the banking industry a lot of unique opportunities. But certain challenges must be overcome for noticeable impacts to occur in the banking sector. To deploy this technology in the banking sector. it must confirm and follow recent privacy laws. This is necessary to protect individual and organizational data as well as the safety of such data. The financial sector is synonymous with huge data. Hence, in the financial sector data scalability must be sorted out before deploying blockchain.