BLOCKCHAIN IN FINTECH: A CATALYST FOR DISRUPTION IN FINANCE WORLD — BY AZGARI LIPSHY
The fintech industry has realized blockchain technology’s revolutionary impact, which includes reducing risks, generating more revenue, and enhancing the end-user experience in a business operation. Like every other tech industry, Fintech is in its developing stage. Many new finance apps are recently springing up daily, offering new and better techniques for processing and managing payments with the help of blockchain technology. I’ve written this piece to help you explore blockchain’s strong impacts and benefits in Fintech.
The payment process in the traditional banking system is slow and expensive. In addition, online payments via credit cards are susceptible to fraud, security issues, and high processing fees. This has pushed financial bodies to begin exploring the possibility of shifting to digital currencies generated by blockchain.
1. P2P payments
WAYS
Blockchain technology has revolutionized the fintech industry. The major areas that have felt the impact of blockchain include:
BLOCKCHAIN IS IMPACTING THE FINTECH INDUSTRY
Finally,money.the traditional payment system is inefficient, which calls for an alternative means of payment, cryptocurrencies.
Adopting blockchain technology in banking and other financial-related services will provide solutions to most security breaches that traditional banks have. Adopting blockchain technology in the settlement and clearing industry could save the investment-banking world a lot of
PROVIDING BANKING TO THE UNBANKED
2.
Whileaccount.billionsdo not own a bank account, many own smartphones. They can open bank accounts with their smartphones because the blockchain is in digital form. As a result, blockchain technology can help make the financial world more accessible to many people.
Currently, more than 2 billion people globally do not own bank accounts. Adopting blockchain technology will assist people incapable of opening a bank
I.
III. Digitally sign documents
II. Manage identity
transactions
3. DIGITAL IDENTITY
There is a constant rise in the number of fake accounts. While banks have strict AML and KYC checks, it isn’t infallible. The unavailability of standardized documentation that clients must submit to confirm their identity makes them more hack-proof.
Blockchain can assist with a digital identity system. The clients can go through authentication once and perform transactions with them worldwide. Blockchain technology can also assist financial users: Share data with others safely data such as and claims
4. LOANS AND CREDIT In the traditional finance system, getting credit or taking a loan is a long process.You are required to provide your details, collateral, and in many cases, sign paperwork. Using blockchain technology, getting loans will be significantly fast- from days to hours or minutes. Blockchain technology provides protection, privacy, and increased security.
5. BLOCKCHAIN AND THE TRADING WORLD
Presently, the world trading market depends heavily on hardcopy documents. For example, if you purchase government bonds, they are normally in a physical form. Also, resolving a transaction in the trading world is excruciatingly slow and can take three days or over the weekend to Withconclude.theadoption of blockchain technology, every transaction can exist in digital form. Through tokenization, there would be no need for any form of physical paperwork and third parties, which will increase the speed of a transaction process and allow it to be completed in minutes.
REGULATORY COMPLIANCE AND AUDIT
6.
Numerous startups are providing regulatory compliance solutions generated by blockchain technology. A primary benefit of blockchain technology is that it creates fixed records of every transaction. As a result, it decreases the time of a company’s operations auditing process along with the cost. The fixed feature of blockchain also helps to lower the possibility of inaccurate reporting, which guarantees the integrity of all the Nowrecords.thatyou have explored the five excellent ways blockchain impacts the fintech industry, let’s examine the benefit of blockchain in finance.
Crypto lending brings an efficient, transparent, and new lending process into the finance industry. The borrower can use their cryptocurrency assets as collateral for acquiring a stablecoin or fiat-based loan while the lenders offer them the assets required for the loan at an interest rate that has been agreed upon. This can also work the other way. Borrowers can occasionally use their stable coins or fiat currency as collateral to borrow cryptocurrency assets.
CRYPTOCURRENCY LENDING
7.
WHAT ARE THE BENEFITS OF BLOCKCHAIN IN FINANCE?
Blockchain is open, inclusive, secure, and opens business networks that facilitate digital security to be released within a short time at a higher level of customization and reduced unit costs. Blockchain technology has numerous benefits to offer the finance sector, which include:
. Security
The transparent and fixed ledger allows different parties in the business network to supervise data collaboration easily and reach an agreement. Blockchain is a shared ledger system used for managing, recording, storing, and disseminating transactions safely in various domains. Blockchain in finance has permitted the execution of secure application code designed to be protected against third parties, thus making it impossible to hack or manipulate.
. TRUST
. PROGRAMMABILITY It aids in making and implementing smart-contract, secure software that computerized logic, boosting efficiency, programmability, and trust. . High-Performance and Scalability Blockchain in finance comprises private and hybrid networks designed to sustain many transactions per second. It supports interoperability between private and public change, offering businesses immense resilience and universal reach.
. TRANSPARENCY
Blockchain technology mutualizes standards, utilizes protocol, and distributed processes, which serves as a single shared source of growth for the network applicants. It amplifies the customer experience and enhances data integrity.
. Privacy Blockchain technology in finance provides advanced tools for data privacy over the diverse layers of software stacks, permitting the selective distribution of data in a business network. So, transparency and trust are improved while maintaining privacy and confidentiality.
CONCLUSION
Blockchain technology is relatively young but has overtaken the industry, and Fintech isn’t left out. Blockchain technology is revolutionizing the fintech industry in various ways: reducing cost and time of operation, eliminating third parties, improving the identity verification process, and improving efficiency. These and other benefits are created to assist the industry in transforming digitally!
ABOUT AUTHOR Azgari Lipshy writes about technology, yoga, and her solo travels worldwide.
META DESCRIPTION Blockchain technology is being widely adopted in the financial technology industry because of the revolutionary changes it has brought to the world’s financial system. “If you can think of a supply chain for something, whether it involves individual assets, numbers, data, or money, blockchain is likely to make that chain much more efficient.” SOURCE finance-world-by-azgari-lipshy-2b5fedc43d27azgarilipshyarticles/blockchain-in-fintech-a-catalyst-for-disruption-in-https://medium.com/@CREDIT:
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