9/30/21, 10:26 AM
Blockchain Technology and How it is Disrupting Traditional Financial Services | Jason Solis | Technology
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Blockchain Technology and How it is Disrupting Traditional Financial Services by Jason Solis | Sep 30, 2021 | Business, FinTech
Blockchain technology is a decentralized public ledger that records the origin of digital assets. This technology records data in a manner that is hard to hack or change without authorization. The senior chairman of Goldman Sachs, Lloyd Blankfein, defined blockchain technology as a vehicle to perpetrate fraud. Many banking experts agree that blockchain technology and other Decentralized Ledger Technologies (DLT) may affect traditional banking services. However, the question of whether it will replace or revolutionize standard banking services remains unanswered. Blockchain technology involves unvetted parties coming into agreement on the state of databases without an intermediary. Banks and financial institutions have been the middlemen of such transactions for ages. Blockchain does not need decentralization which ultimately produces improved coordination. https://jasonsolis.net/blockchain-technology-and-how-it-is-disrupting-traditional-financial-services/
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9/30/21, 10:26 AM
Blockchain Technology and How it is Disrupting Traditional Financial Services | Jason Solis | Technology
It is clear that blockchain technology is slowly taking over key services of traditional banking services. Claims and compliance processing and distributing the contents of sensitive legal documents such as a will have been automated. Despite the cold reception from banking experts and investors, blockchain technology may be a preferred choice for financial services. It has shown better governance around data sharing and collaborations. The cryptocurrency technology’s very public and loud backlash hasn’t dimmed its growth. While traditional banking is suffering, blockchain technology and DLT promises new business models. By providing a ledger with no one administering, blockchain technology can offer specific financial services. Clients who used banks for services such as making payments and securitization can now do it independently. Further, blockchains have tools like “smart contracts.” This tool is a self-executing contract that automates manual processes. Such processes include: Payments: A decentralized payment system such as bitcoin makes it possible to make rapid and frequent payments. Also, the fees are lower than the banks. Trade Finance: Blockchain technology is replacing the bulky paper-heavy bills used in trading. The DLT provides more transparency, security and trust among global trade parties. Fundraising: A new model financing Initial Coin Offering (ICOs) disseminates access to capital from traditional capital-raising firms or services. Loans and Credit: Blockchain is preferred with no middlemen for loans and standard high-interest rates. The technology is making borrowing loans more secure with lower interest rates. Further placing banks and financial institutions at a disadvantage.
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9/30/21, 10:26 AM
Blockchain Technology and How it is Disrupting Traditional Financial Services | Jason Solis | Technology
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