How Blockchain disrupted FinTech Sector?

How Blockchain disrupted FinTech Sector?

Cryptocurrencies, particularly Bitcoin is making great pace, and leaving several curious about its underlying technology. Those who keep on cryptocurrency must have encountered the contribution of Blockchain and the way it is securing the transactions.

The blockchain has found its use-cases in different industries right from retail to healthcare to fintech. However, people could still relate to the blockchain potential and use cases in the fintech world.

The biggest thing about blockchain development services is that it maintains data integrity, saving data from tampering, and simultaneously the same time assures that the data is available to its users in real time. As no one can deny such significance, it is possible to find use cases of Blockchain in the fintech world. We are going to discuss this in the following segment. So stay with us and see how blockchain has disrupted fintech.

1. Reducing Effects of Cyber Fraudulent Cases Finance is a broad segment and has several intermediaries, including money transfer, stock exchange, and even banks are also considered under

it. However, all segment are prone to fraudulent economic cases due to having a centralized database which is vulnerable to cyber attack. This leads to damage of the entire database. When a hacker gets access to one system, they also get a key to another security breach that causes loss and security failure.

Besides the centralized database solution, Blockchain introduces distributed ledger. In this system, data is put over blocks, and each block holds a timestamp. Every block contains a hash of the previous block thus creating a chain of records that is immutable and cannot be falsified. As it involves multiple blocks, it wouldn't be easy to breach the security of the system. It reduces the damage and loss caused to the financial institutions.

2. Customer Identification Made Easy Financial institutions spend around 500 million USD to maintain KYC (know your customer). Identifying customer and updating their data involves a number of steps in financial institutions that cause a lot to businesses.

Blockchain, where data is stored in blocks, reduce the cost and labor spend in KYC verification and data maintenance via cross-institution client verification. It also helps customers manage their digital identity. Financial institutions, on the other hand, get easy access to data and validate it conveniently. With blockchain, independent verification can be provided wherein once a user get verification from any company that data will be accessible to other organizations. This ensures KYC verification don't require to start over again.

3. Secure and Faster Payments Processing Blockchain with its innovative system possesses the potential to revolutionize the current payment processes. Having a decentralized network, the technology enables higher security that lowers down the cost of payment processing. The system would be possible to implement between organization-client or between banks.

For instance: International transactions take days for completion due to a number of intermediaries involved. If this system gets blockchain upgradation, cross-border payments become more efficient and less timeconsuming. Ripple today available as the best example of blockchain based global payment solutions.

If you also have any breathtaking idea of using decentralized network within your business, hire blockchain developers from an experienced company today.

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