How Embracing Blockchain is Transforming Banking & Finance Industry
Sustaining over a decade since its advent, blockchain, has revolutionized numerous business arenas and has obtained a lot of regard in the past few years. Banking and finance markets are the crucial sectors that are under constant pressure to maintain their asset quality and capital adequacy to address their customer demands. Thus, blockchain technology that functions as the shared distributed ledger could efficiently streamline the banking process and minimize the sector's inefficiency. Let us quickly check out how blockchain could enhance banking and finance services.
Minimizes Processing Charges and Time
The usage of Blockchain technology could reduce the bank's infrastructure cost for international payment, securities trading and regulatory compliance. Further, the blockchain technology quickens the banking procedures for securities settlement; this fast-paced banking process would eventually minimize the capital that the banks tend to hold for each trade.
Simplifies KYC Process
Generally, banks take about 30 -50 days to review a KYC request, because the verification process involves a lot of players. Adopting blockchain technology has exceptionally transformed the slow KYC process. Every bank maintains a personalized customer data portal and requires data duplication for each request. A blockchain system provides access to the authenticated user to utilize the same data system, thus, eliminates redundant process by providing real-time updates to the banks. According to sources, blockchain technology usage saves close to $ 160 million annually in KYC.
Eases Trade Finance
The most complex transactions in trade finance could be eased using blockchain technology. Blockchain's smart contract aids in executing the trade deal by initiating the transaction only after meeting the set terms and conditions. Additionally, blockchain permits cross-border trade transactions, which drastically reduces the trade and documentation process charges.
Quickens Lending Formalities
Blockchain has significantly changed the loan formalities, by making it secured, traceable with easy and quick procedures. The technology has also aided in minimizing the administrative costs, data duplication and human errors.
The technological advancement is posing as the driving force for the organizations to progress. It has not just elevated the customer's expectations but, has also aided the organizations to meet their customer's needs seamlessly. By adopting blockchain, the banking and finance firms can make their services and facilities simple yet robust.
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