Five ways banks are using Blockchain
An Overall Look:
Even a single day might go by barely before there will be a new announcement about how banks have recently been trying to use the blockchain technology framework in order to see how to change and transform the different types of businesses and business functions that they have. Different things have made it much more prominent and easier to be able to understand the work. For example, databases and other types of data having to be shared in a mutual environment and amongst different types of individuals. This is good since it would allow the sharing of a database which is present on a blockchain network and therefore that would make it extremely difficult to be able to change or alter the ledger maliciously since the network itself has been decentralised. Blockchain firms have been able to raise around 240 million dollars in capital for their functions and abilities this year and that also in only the short timespan of around six short months. While most of this investment has been by banks and this trend is showing no signs of stopping anytime soon. Most of the new ways in which banks have been trying and hoping to begin to invest in most of the new ventures that have come up recently has been involving them to create a chain of different companies who would then come together and create a panel of companies to test out the waters and therefore the potential within this new type of technology which is blockchain allowing better methods of doing simple transactions such as buying bitcoin with credit card. However, while most tests show that in terms of significance of the commercial standing there is not much to go on in this way. There are certain aspects of the banking industry however, that might be greatly changed as a result of the blockchain and its effects on the already existing systems today. If you would like to read more about Blockchain adoption race visit this article.
Five ways banks are using the Blockchain they are as follow:
1- Clearing and Settlement Processes
The first way the banking industry might change is that clearing, and settlement area of banking has been difficult to understand as it helps to record the loans etc. along with the bonds, stocks and other types of securities that are present within the industry and this system will now be changed as time goes on. Several reputable websites have been stating that many prominent banks could be saving a lot of money in some cases the estimates come up to 10 to 12 billion in most cases and the blockchain technology would be enabling the bank to improve its effectiveness since the settling of the debt and clearing of it would be a much smoother process and therefore its impact on the clearing houses and other prominent sectors of banking would be prominently displayed. Since right now most of the processes are completely manual and that has led to most of the work getting done much slower and there is potential for blockchain to bring efficiency back into the process. Many prominent firms dealing in securities and other similar types of financial products have expressed their intention to develop and implement a blockchain system within their clearing methods which allows for use of bitcoin debit card, coin cards and many more.
2- Payment Methods
Payments are another prominent form in which banks are able to work. Especially in most central banks in most countries it is prominently shown that there is a huge amount of potential that will allow the payment systems of these banks to be able to get shifted onto a system of blockchain based software. These can be used in a much better way and can be used to both regulate and perform transactions using cryptocurrencies. In many ways this responds to most of the rumours that state monetary policy of the country can be adversely affected by the use of bitcoin. Along with showing that many prominent bankers are now aware of the extent to which blockchain in the banking system could greatly benefit them. Since most individuals today have been implementing and working with this system to see what can actually be used prominently. Commercial banks however, are not just waiting around and sitting trying to get central bankers to do all the work and have been performing experiments and started projects of their own which have been successful in many ways. For example, Switzerland trying to give cryptocurrency a physical presence by using tokens that can be used to exchange for money. If you would like to read more about banks using blockchain visit this article.
3- Information Transportation
While much of the trading finance today has been paper based since everything from money to credit letters and others have been transported either through faxes or through postage. Since the reasons to perform this is that many of the banks require a database to share the same information and also keep it secure. The decentralised nature of the blockchain is perfectly ideal for fulfilling these conditions and the removal of paper from the entire middle process will not only ensure smoothness in the process itself but also efficiency which will allow the company to function easily. If you would like to read more about blockchain are used in banks visit this article.
4- Identity Verification
Another prominent rule if the identification. The identification in the world of banking simply means being able to verify whether someone is who he says he is and therefore giving them money, they request and so on. Those acting under false identities need to be punished in order to make sure that the customers are being protected so that their identities cannot be stolen. Banks have been attempting to create a system that will allow the identities of the customer to be recorded and kept and while a solution is not found yet the nature of the blockchain system could be a solution to that problem since it is shareable easily and supremely secure.
5- Speed of Communication
The final part are loans. The reason for this is that when the companies in the United States raise money the money changing hands etc. takes too much time and the delay in both the money changing hands as well as the backwards faxing system in place to communicate it too backwards and needs to be changed prominently and fast.