Blockchain is certainly one of the most sought-after technologies nowadays. It has immense potential to revolutionize every aspect of our day-to-day lives. It makes applications decentralized, which offers a high level of security, transparency, and flexibility across diverse business networks. In this blog, we will take a look at how blockchain financial solutions revolutionize its space globally. For instance, we will discover how blockchain insurance solutions can prevent fraud and address inefficiencies.
Blockchain creates an immutable record of data, shared among a distributed network, and made secure with the most advanced form of cryptography. It is also highly flexible and has found its primary use cases in the financial services space. They include the management of various operations, especially data entry and analytics tasks.
Although blockchain technology has made its effect felt all across the globe, the two industries in which it has gained maximum traction are banking and finance. Trillions of dollars move across the global financial system each day, serving billions of individuals, businesses, and groups of individuals. But all these day-to-day transactions heavily rely on manual processing and involve a lot of paperwork. It not only causes uneven delays but also makes the process way more complicated to manage. Or worse, it often gets on your nerves by causing whopping losses if not managed properly.
In this scenario, Blockchain can be the remedy we are looking for. Blockchain has done a bang-up job by making the entire process as swift and secure as it could ever be! This state-of-the-art technology has not only digitized the entire process. It has also rendered a decentralized peer-to-peer system. A system that no third-party, intermediary, or centralized authority controls. So, major businesses and companies can make big transactions with minimal transaction fees without requiring any central system like banks to govern transactional data.
Blockchain has got all that can revitalize the banking and financial industry space with its applications and use cases. Below we have listed a few applications and use cases of blockchain technology that can bring a drastic change in the space.
Not long ago, KYC required verifying hard proof of documents by meeting customers in person. However, those days have gone now. Worldwide financial institutions spend a fortune on keeping up with KYC compliance. A rough estimation is that they spend somewhat around $80 to 500 million dollars every year in KYC verifications and customer due diligence regulations. Following these regulations is crucial to protect against terrorism and money laundering activities.
In this field, Blockchain technology can be a major uplifter. It allows independent verification of one client by one organization. Further, other institutions or groups of institutions can access the same verification. Thus, you don’t have to start the KYC process over and over again. Apart from that, it also reduces the administrative costs up to great extent.
Blockchain offers top-tier protection to user data by using the most advanced form of cryptography. It stores data in a series of blocks that form a massive database. Further, encryption protects sensitive user data, making it immune to all kinds of cyber-attacks and online thefts. The ledger contains a timestamp and stores a small patch of transactions with a link to the previous block.
The blockchain is a distributed ledger. It means cybercriminals will need to hack the entire network rather than a central hub. It makes blockchain the most advanced storage medium ever to exist and protect against all kinds of cyberattacks.
Smart Contracts are basically self-executing contracts. They automatically enforce negotiation between two or more parties based on certain contractual clauses. These contracts facilitate fair outcomes between parties based on defined terms and parameters. A smart contract solution also saves you from unnecessary paperwork. It does so by creating a permanent record on the blockchain. Nobody can neither delete nor alter or modify the database. These contracts execute automatically when exposed to a certain trigger event.