How Blockchain technology is transforming the old Banking industry.
Blockchain is a technology which supports many data transformations and data handling one such data is Bitcoin. Block chain can be used in any and every sector of our daily routine. Many companies like IBM ,SAP,Amazon,Oracle which deal with huge amount of data need data security can opt for Blockchain technology. Blockchain technology has been shadowed by the scams involving Bitcoins otherwise Blockchain technology can revolutionise every industry in the world and may lead to more efficient data handling and data utilization which can change the way we look at the world. Blockchain technology can completely eliminate the use of ETLs and cloud technologies and booster many new inventions. Blockchain Technology is transforming the banks.
Anybody can write his own code and start his own blockchain version and create his own cryptocurrency. Blockchain is a digital holder of your assets and It is not easy to hack or even to try hacking blockchain. Blockchain technology is two worded terminology which means chain of blocks of data. blockchain and bitcoin can never be interchangeable as they are two different things but they can be used with each other as they are complementary in nature. Bitcoin has made people wealthy. And blockchain has made the field of technology and science wealthy.
Blockchain technology is a game changer which will take the world by a storm just like internet did decades ago when it was introduced as just a DOS search interface with text typed in and answers received in text.
Blockchain technology is transforming a number of sectors, and this includes financial intuitions like banks. What major banks need to weigh is the extent to which they embrace blockchain and the threats that the technology poses to the industry.
Blockchain technology allows multiple parties to have simultaneous access to a constantly updated digital ledger that cannot be altered. This approach to financial attractions is growing in appeal. This is borne out by a survey conducted by The International Securities Association, which found that 55 percent of companies polled are assessing, researching, or developing solutions relating to blockchain technology. This is despite the official line from many major banks suggesting they are wary of cryptocurrencies and less convinced over the need for blockchain.
The impact of blockchain on baking is assessed in a new study from CBI insights. The study is titled and it takes a look at the impact of digital ledgers and digital currencies on the established banking sector.
There are six major areas, called out in the report, where blockchain could have an impact upon traditional banking models. These are:
The disruption arises here through the elimination of intermediaries to approve transactions between consumers. This means blockchain technology could lead to faster payments at lower fees than banks. This is particularly attractive for lowering the cost association with cross-national border transactions.
Clearance and Settlement Systems:
In this context, digital distributed ledgers have the potential to reduce operational costs and bring customers closer to real-time transactions between financial institutions. Moving money around the world creates a number of logistical problems; the report suggests these can be addressed through blockchain, keeping track of all transactions publicly and transparently.
Companies operating blockchain would have faster access to liquidity via initial coin offerings. This would deliver a new, cryptoeconomic model of funding that opens up new streams of access to capital, and circumvents the need for traditional financial services. This presents a new and more direct model, for blockchain companies can skip the conventional fundraising round and selling tokens directly to the public.
The report suggests that by tokenizing securities like stocks, bonds, the implementation of blockchain is disrupting the structure of capital markets.
Loans and Credit :
Through the elimination of established financial institutions in the loan and credit industry, blockchains can create alternative and secure ways to borrow money and with it potentially lower interest rates.
While these advantages are there for the taking, the report also notes the blockchain remains in its infancy and there remain several technological issues to overcome for blockchain to be operated smoothly. The questions for traditional banks are: ignore this, offer alternatives, or work with start-ups and play a part in the change process.