How Blockchain facilitate & solve many problems in the society
Blockchain is a decentralized, digitized public ledger of all transactions of cryptocurrency. It is a highly advanced technology that can radically transform the financial and banking sector, offer various opportunities for innovation and growth, and is capable of decreasing costs and reducing cyber risks. It is expected to bring exponential changes in the banking sector and will make different present processes and systems obsolete.
Blockchain is used extensively in cross-border remittances, KYC, trade finance, and digital currency. Although the , it has different limitations of scalability, privacy, and security which need to be addressed.
Benefits of Blockchain Technology in the Financial Sector
Removal of Intermediaries: The most important foundation of any business is trust. Cryptography-based blockchain technology eliminates third-party intermediaries as the trusted keeper. It will decrease the cost of overheads when parties interact with one another online without the requirement of middleman or central authority.
Increase in Efficiency: Blockchain improves the processing speed of the transactions, because it reduces the decision-making time across the board in financial companies with minimal human intervention. It reduces duplication that arises while keeping records, errors, and reconciliations and frauds, leading to quick settlement and payment. In case of an event such as earthquake, flood, or war at a location, the remaining blockchain participants can accept a transaction.
Resolving Identity Theft Issue: Blockchain helps financial institutions handle the issue of identity theft as users have full control over the transactions. It safeguards the merchant from risks involved in frauds, because once a transaction is performed, the transaction cannot be changed and will not contain important personal detail. It also permits receiving and sending of money across the globe at any point in time without the central authorities' involvement. The transactions are verified immediately and are shown to all the participants. Also, the cost of the transaction of flat money conversion is very less.
Consortium Accounts Monitoring: Blockchain technology can be effectively utilized to prevent funds diversion. The lender is not able to track the fund's end use because the borrower does many transactions in the transfer of funds from one bank to another. Therefore, blockchain assists in the end-use monitoring of a borrower sponsored by the bank's consortium. This will result in (non-performing assets) as the banks keep their eye on the fund's end use. All the members of the group get the information related to the movement of funds, and this will assist in strengthening the mechanism of monitoring.
Trade Finance: It is also one of the important applications of blockchain technology. A complex transaction of credit letter can be made more prompt and simplified if custom authorities, big manufacturers and shippers, and other big corporates are on-boarded on the network of the blockchain. On the privately distributed ledger, the information is shared by importers, exporters, and their banks, respectively. After fulfilling some specific conditions, the deal of trade can be executed automatically via different smart contracts. The parties can see data and actions done on their systems.
KYC (Know Your Customer): Financial institutions and banks are highly concerned about the rising prices that they need to bear to comply with the norms of AML (Anti-Money Laundering) and KYC. Each financial institution and bank individually perform the KYC process.
Blockchain technology helps these banks decrease the time needed to settle cross-border remittances from three days to few minutes.
For a promising career, working professionals or students can join the Blockchain management course to upgrade their skills. This course covers the fundamentals of bitcoins and Blockchain including the respective mechanisms and structure. This will help working professionals to perform the contract from console and web interfaces.
The blockchain certification course makes you proficient in concepts of Blockchain programming such as hyper-ledger, distributed ledger, and cryptocurrencies. The Blockchain online training focuses on important concepts such as private Blockchain concepts, Ethereum public blockchain, bitcoin mining, core layers of Blockchain and Blockchain architecture.