Even after a decade, it is always a question for many “What is Blockchain?”. Well, this blog will guide you through the benefits of Blockchain Technology in the financial sector with real-life examples. Read below and let us help you to implement Blockchain into your business.
Blockchain has been considered one of the most disruptive innovations for over a decade. Blockchain technology has the potential to transform the financial industry by increasing security, transparency, and efficiency.
Many businesses in the financial sector, including capital market, asset management, fund investment, retail, banking, lending, trading, and insurance companies, are adopting Blockchain Development Services.
Introduction to Blockchain
Blockchain is a decentralized and distributed ledger of databases (called blocks) interlinked with each other (called chains). These blocks are a list of records and track of transactions that keep growing as information transfers between nodes (systems used to store and verify data).
Key takeaways/fundamentals of Blockchain Technology
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Each block has its own unique identity (let’s say, fingerprint).
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Database, Hash (unique ID), and Previous Hash information are there in every block. The database gets updated with each transaction.
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New information/data is entered in a fresh block. It will have its new identity. Once it’s distributed further, blocks will be chained further chronologically.
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The database is audited and verified through thousands and millions of nodes.
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These records are decentralized data that is publicly accessible, not to any specific central authority.
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Users have a Public Key, and Private Key to keep their data protected.
Why Blockchain is Immutable & Secure?
Now, you know about Blockchain Technology. So, you can answer why the technology is immutable and secure to store data. It is next-to-impossible to temper the data since the blocks are interlinked with each other. It needs to be updated and verified by millions of nodes to amend the information in a block.
Advantages & Benefits of Blockchain Technology in Business
Other than its transparency and immutability, Blockchain is also beneficial considering the following features; such as
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Transparancy
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Quicker Payments & Remittances
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Funding & Investing
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Accounting using a shared ledger
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Optimal identification protection
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Verified users
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Low operations cost
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Reduced frauds
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Lesser charges
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B2C and B2B Engagements
Uses of Blockchain Technology in the Finance Sector & Examples
Blockchain development services are helpful for multiple industries, such as supply chain, healthcare, government, manufacturing, retail, media, communications, insurance, automotive, and travel.
Cryptocurrencies were the first real-life implementation of Blockchain in the financial sector.
MetLife is a USA-based life insurance company. It is one of the largest insurance companies specializing in insurance and employee benefits services across all 7 continents. The company has a customer base of more than 90 million.
An insurance company decided to utilize Ethereum Blockchain Technology in 2019. The principal focus was to disrupt the Multitrillion Life Insurance Industry. LumenLab (MetLife innovation center) started testing automated insurance services, specifically, for gestational diabetes. The insurance holder doesn't even need to make a claim.
Furthermore, many banking institutes have implemented this technology for banking with the assistance of Blockchain development companies. Banco Santander, Barclays Bank, Swiss Investment Bank, Citibank, Commonwealth Group, and DBS Bank are some of the banking institutions using blockchain tech.
Let’s continue with one more real-life example of Blockchain here. Goldman Sachs is one of the largest banks in America, with more than 3 million customers. The bank is using technology for bonds, investments, transactions, tokens, and much more.
Besides, according to research;
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More than 60% of financial institutions are planning to adopt blockchain technology for international transactions.
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23% of companies are planning to use the technology for security clearance and instant settlements.
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Over 20% of banking institutes are interested in Blockchain for KYC (Know your customers), regulations, and anti-money laundering services.
Conclusion
Blockchain Technology has been considered one of the most significant technological innovations for businesses. Financial service providers usually consult the
Blockchain Consulting Company to streamline their critical finance business processes, including supply chain, payments, accounting, records, frauds, clients, smart contracts, copyrights, and much more.
