Blockchain has gained international prominence through cryptocurrencies. Blockchain tracks the complete lifecycle of a financial transaction and secure financial products at minimal cost. The technology records and validates every transaction in such a way that none can tamper or delete. Aeternity, a fintech company leverages the advantages of blockchain technology to protect operations and create scalable smart contracts to secure automated payments. Blockchain technology provides peer-to-peer (P2P) transactions which facilitate zero involvement of intermediaries. The blockchain is expected to bring exponential transformation in the banking and financial sectors and make different processes obsolete. It is extensively used in KYC, trade finance, cross-border remittances, and digital currency.
Trust is the foundation for most businesses. Third-party intermediaries are eliminated as a trusted keeper by cryptography-based blockchain technology. This reduces the overhead costs when the parties interact with each other online without the requirement of a middleman. Blockchain reduces the decision-making time in financial sectors with minimal intervention of humans, thus improving the processing speed of transactions. By minimizing the duplication that arises while keeping records, errors, and reconciliation, the technology facilitates quick payment. It resolves the identity theft issue by enabling the users to have complete control over the transactions. This protects the customers against frauds. The important feature of blockchain technology is Consortium Accounts Monitoring (CAM), which prevents diversion of funds. Blockchain technology decreases the bank’s time that is required to settle cross-border remittances.
Being a backbone that is revolutionizing fintech industry, blockchain supports better performances of several processes from the exploration phase to application phase. Holland FinTech forecasts that about $660 billion in revenue might migrate to fintech services from traditional financial services in the areas of crowd funding, wealth management, and lending.
It is obvious that even though blockchain is in its infant stage, the possibilities are still being explored to keep up with new developments to make the best use of it. Though blockchain technology has enormous potential, it has different limitations concern to scalability, privacy, and security which need to be addressed.
Check out: Top Blockchain Technology Solution Companies
