The Financial Sectors Disrupted by Blockchain Technology

 The Blockchain is a digital ledger of transactions. These are distributed Ledgers are for storing the timestamped transaction among the parties involved. It affords a direct connection among the parties by eliminating the central authority for validating the transactions. Each node is connected in peer to peer network and avoids a central controlling node.

 

Blockchain has multiple uses in the financial sector, from dispensing commercial papers and helping the faster transfer of securities and payments to reducing trading costs by eliminating mediators and enhancing the client experience. The technology also shrinks and streamlines the trade finance process with the least third-party interference.  

 

For international transactions, blockchain allows real-time payments and by reducing liquidity, and operational costs, verifying fraudulent. 

The blockchain has the potential to eradicate the time and risk in issuing international letters of credits and documentation process. 

 

The Blockchain helps in regulatory reporting and KYC compliances as it stores all the data in a secured format, where once uploaded in blockchain can be referenced while creating a new account in multiple branches of the same bank and it can also be used among inter banks. These help in reducing human involvement in the verification process.

 

The insurance sectors can be enhanced with blockchain, by leveraging financial details stored on the distributed ledger, with the help of KYC details. It helps us in the underwriting process to verify the identities, validates, and initiates the claims processing.

 

World scenario 

 

Blockchain provides an influential economy It is going to be like a programmable economy that is powered by Blockchain technology and new business models eliminating the third party involvement.

 

They predict that Blockchain will add $176 billion in business value by 20251 and $3.1 trillion by 2030. Blockchain market value growth exposes the usual “double hump" growth pattern of emerging technology: Growth in 2020 will reach 120% before shifting to a low of 27% in 2023 and then reaching its second growth peak at 104% in 2026. (Source: IBM)

Blockchain technology is growing exponentially with multiple advancements with enhancing various business verticals like Supply chain, Insurance, Banks, E-commerce, FMCG, and Identity management, etc. The Enterprise Blockchain solutions are preferred as they are designed and developed customized according to the unique business requirements.