According to a recent IBM survey, a staggering 91% of banks are investing in blockchain solutions and 66% of institutions are looking to be in production and operating scale using blockchain technology.
In a report by Juniper Research, banks will use blockchain deployments to realize savings on cross-border settlement transactions of up to $27 billion by the end of 2030, potentially lowering expenditure by more than 11%.
Ethereum consistently demonstrates the ability to disrupt economics, allowing tenfold the financial advantages against existing technologies.
The Harvard Business Review said that “The Blockchain Will Do to the Financial System What the Internet Did to Media.
Is the world ready for Blockchain?
- In Europe, 22 EU Member countries have signed a Declaration of Creation of a European BlockChain
- Business revenue forecasts indicate that the values brought by blockchain will exceed $176 billion by 2025 and $3.1 trillion by 2030.
Some of the benefits of BlockChain in the Financial Sector are:
- Trust, Immutability and Traceability
- Instant Settlements
- Reduced intermediation costs
- Real-time data management
- Reduced Fees
- Privacy
With each new day, there are new use cases which are evident for the blockchain technology and has potential in disrupting the banking and finance sector.
The speed of transactions will be a major benefit for empowering blockchain in finance and banking.
Previously consumers had to wait several days to access their own money, but now, consumers can access banking/financial services while still maintaining the custody of their assets and not relinquishing it to a third party.
Due to the decentralized nature of blockchain, the risk to customers with regards to identity theft is reduced as the information is not archived in a centrally located database.
Additionally, using smart contracts, the Finance/Banking sector can execute multiple types of transactions having immutability of title, value and identification of both tangible and intangible property.
In terms of Compliance, Know Your Customer (KYC) is a major requirement , where Financial organizations globally would have to stringently adopt and comply to the regulated policies. This process is increasingly time consuming, and reduces efficiency across all teams.
Blockchain technology enables documents to be exchanged between banks and agencies in a clean, transparent and efficient manner, as it enables an immutable trusted source of identification. This reduces the time taken for KYC, as well as ensures faster account opening and ensures the data integrity and privacy is maintained.
Owing to the decentralized nature of Blockchain, the chances of it being compromised are significantly lowered and nearly mathematically improbable.
Companies can gain significant business benefits by harnessing the potential of Blockchain with the right technology and practices .Financial institutions have realized the potential of blockchain in making the services agile, dependable and easier. We are witnessing the rapid adoption of blockchain as it provides compliance at a protocol, legal and regulatory level.
In the coming years, we’ll see the interplay between the centralized financial systems and blockchain based technologies.