How will the Finance industry benefited by Blockchain Technology in 2020

How will the Finance industry benefited by Blockchain Technology in 2020

Blockchain is a growing technology, and when we talk about its impact, it has propagated across different sectors. Although we are witnessing its growing importance in all the business sectors, it is the financial sector where maximum impact is felt and why not? Afterall, Blockchain is the underlying technology for Bitcoin, that led to the digitization of financial transaction.

In this blog, we will be exploring different ways in which Blockchain technology has impacted the financial industry. As per the reports of, 77 % of financial institutions are expected to implement Blockchain Technology by 2020. But before that, we must understand what the current challenges which the finance sector is currently facing are.

Current challenges of the finance industry:

Despite digitization and use of modern technologies,the finance sector is facing certain issues which have paved the way for the proliferation of the blockchain technology in this field. A few of them are :

1. Lack of transparency
2. Involvement of the third party
3. Cost
4. Time-consuming processes
5. Data security

If we have a closer look at the features of Blockchain technology, then we can say that it can help in overcoming these challenges. Blockchain is a distributed ledger technology which features:

1. Immutability
2. No third party involvement
3. Complete transparency
4. Faster transaction
5. Data encryption cryptographically

All these features make Blcockhain one of the most sought-after technology and inevitable for all the business segments inclusive of the finance industry.

Let’s understand how Blockchain is going to impact the financial industry in 2020:

1. Smart Contracts- Through Blockchain offers a number of features. First, we would like to discuss smart contracts. These pre-programmed contracts have pre-determined conditions between the two parties. Once the conditions are met, the financial transaction is executed.

Trading Platform- Another popular use of Blockchain Technology is going to be as the provider of the trading platform. We know that Blockchain allows the exchange of assets without third party involvement. Using this feature, the bank can set up a new trading platform on Blockchain protocol, and the user can use this platform for the exchange of asset without any hassle.

2. Faster payment- Since Blockchain allows direct interaction between the two parties, without third party involvement, so people can use this platform for an instant transaction without waiting for third party validation and confirmation.

Data Security- One of the biggest problem that the financial sector is currently facing is the security of information. Since every transaction is stored on the ledger and is cryptographically encrypted, it makes it safe and free from any tampering or alteration.

KYC- Banks spend a lot of money in the KYC process. But with Blockchain, we can expect lesser cost and higher efficacy. As per the reports of Thomson Reuters in 2017, the KYC specialist employed by banks crossed the marl of 10 billion dollars. With Blockchain all the changes in the consumer data is automatically refreshed across the system. Thus it reduces the time and cost of restarting the KYC protocol when someone registers the client.

These advantages make Blocckahin inevitable for the finance industry. With the growing importance of Blockchain technology, there would greater need for Blcockahin experts and pursuing a career in this field will open the avenues of new opportunity. To enrol for becoming certified Blcckahin expert, you can connect with Blockchain Council.