How Blockchain Technology Builds the Future of Finance

Digant R. Patel

September 19, 2022

Blockchain Technology¬† is a decentralized ledger that increases security, blocks identity theft, and lowers costs. There are several benefits to blockchain implementation in the financial services industry. Let’s explore some of them:

  1. Blockchain can help financial institutions comply with Know Your Customer (KYC) regulations. While this is a crucial requirement for any financial institution, the process is time-consuming and often lacks automation or team integration.
  2. Blockchain can make the KYC process more convenient by providing a single digital source of identity information.
  3. Blockchain reduces resource costs and ensures data privacy.

Blockchain technology is a decentralized ledger

Blockchain technology is a decentralized ledger network that enables peer-to-peer value exchange. This technology is often associated with crypto assets but can also be used in many other applications.

Blockchains have immutable records, which means that information stored on them cannot be changed later. As a result, blockchains provide a high level of transparency and security and are an excellent asset for financial services. 

It increases security

Blockchain technology is becoming more popular in the field of cybersecurity. The technology allows companies and organizations to increase security and trust by providing a decentralized system of data management. This means users can trace data shared within business networks and ensure no one can alter it. In addition, the decentralized nature of Blockchain makes it more difficult for cybercriminals to gain access to data.

The security of blockchain technology depends on its design and architecture. Properly implementing access control, authentication, and data security are essential to its success. Furthermore, implementing intelligent contracts requires extensive testing to ensure that all the data in the blockchain system is safe.

It blocks identity theft

Blockchain technology is an innovative way to protect consumers from identity theft. It relies on 51% consensus among those involved in a transaction to verify a person’s identity. This is a tremendously effective way to combat the growing threat of digital fraud. It prevents third parties from accessing an individual’s private information, making cyberattacks more challenging to conduct.

The immutable record of the Blockchain allows individuals to take control of their identity information. While digital identities are not universally accepted, people receive a unique identifier for every application they use. Managing and safeguarding this sprawling web of private information is difficult for organizations and end users.

It reduces costs

Blockchain technology reduces costs in finance by streamlining processes and providing security, traceability, and transparency. 

Blockchain technology also reduces duplication, which causes conflicts and delays in financial services. For instance, a syndicate of lenders can share a loan ledger instead of keeping track of it separately. Other areas where the system may reduce costs are international payments and corporate stock records. Although blockchain technology will not impact end-users, it will open new avenues for financial institutions and improve customer service.

It can be integrated with big data

Big data and Blockchain technology can combine to create new applications and services. This can help both businesses and consumers.Blockchain can also improve trust between companies and customers by enabling more accurate product tracking.

Big data is a lucrative market. Its revenues will reach $203 billion by 2020. According to some estimates, blockchain ledger data will account for around 20% of this market by 2030. The combination of big data and Blockchain will be an enormously valuable source of revenue for both sectors. In addition, the two technologies can help form a value chain of shared data and a new ecosystem.

Blockchain technology provides security to Big Data by enabling financial institutions to track fraudulent transactions in real-time. It is a distributed database that is secured by cryptography. Blockchain records contain details of transactions and links to previous blocks.