A decade ago, who would have thought a process incorporating the formation of blocks and then combining them to form a chain can revolutionize the entire fintech industry. Here, we are talking about Blockchain, the technology has transformed the ways financial institutions were used to store, manage, recover, and process data.
What Is Blockchain?
Blockchain is a decentralized public ledger that stores records of data in the form of blocks, which are connected via cryptography. Distributed database, transparency, permanent records, computational logic, peer-based communication are some of the principles this technology works on.
Considering its multidimensional uses, both the small- and large-sized companies are implementing the technology into their business processes to ensure the security and integrity of data. According to PWC, 77% of the incumbent financial institutions are expected to integrate Blockchain technology in fintech to boost customer retention in the next three to five years.
What’s more interesting is that the global Fintech Blockchain market is projected to reach USD 8,311 Million by 2024, reveals a GlobalNewsWire report. These numbers clearly depict that Blockchain is soon going to hold a significant place in the fintech sector.
If you, too, want to leverage the technology to boost your business, then you must be looking out for blockchain development company. But before you finalize the same, let’s look over how the Blockchain is becoming the next big thing in the finance + technology world.
Blockchain In Fintech
- Simplified KYC (Know Your Customer) process
- Advancement of the stock exchange market
- Ease of syndicated lending
- Transformation across the complete banking system
- Helps in crowdfunding
Let’s read all these points in detail:
Simplified KYC (Know Your Customer) Process
The arrival of Blockchain technology into the fintech industry has relieved companies from the hassle of storing and retrieving customer information collected for verification. They can check the entire data on the decentralized network after getting permission from the clients. The security of this data can be maintained through digital signatures.
With all the data available on a secured decentralized network, processes like account opening and processing new service requests will get effortless, accurate, and time-saving.
Advancement Of The Stock Exchange Market
Stock markets are one of such places where the role of third-parties is something you cannot ignore. From helping people to buy and sell shares, providing ownership certificates to various other purposes, third-parties charge a hefty brokerage cost or commission fees to get the work done. The arrival of Blockchain in the fintech industry would eliminate the need for such intermediaries by offering decentralization.
Exchanges like Changhero, DEX, OpenLedger Dex, and Decentral Cryptocurrency Waves Dex are some of the use cases of it.
Ease Of Syndicated Lending
Blockchain is enabling companies, lending capital to individuals, to speed up their background check processes and automate their file work to offer loans without the hassle of going from one bank to another. The best example of this is Fusion LenderComm, a platform that runs on R3’s open-source Corda Blockchain to offer faster loans.
Transformation Across The Complete Banking System
With its core feature, i.e., maintaining unchangeable and irreversible records, the blockchain technology has proven as a breakthrough for the startups attempting to replicate the banking solutions. Through digital-only banks and allied applications, the technology is lending the ease of operations and customer verification process. Merely by providing customer ID, customers can access their entire bank account online.
Helps In Crowdfunding
Getting funding from venture capital, banks, and various other investment sources often takes a considerable amount of time, which may cause startups to give up or suit their generalized business objectives. This is when crowdfunding comes into action. However, there have been some incompetence with the number of successful campaigns and the applications generated.
The advent of Blockchain in this field is bringing the utmost level of transparency among the startups as well as investors. It has also improved the rate of successful executions of projects. On top of that, smart contracts are helping to prevent any fraud and build accountability.
If you are looking out for Blockchain app development services or integrate this technology into your fintech app, then contact a reliable mobile app development company today.
Hope the article was useful!
In a Nutshell
It is undeniably true that the advent of Blockchain technology into the fintech industry has caused a major disruption. The technology is making the financial institutions to go beyond their usual possibilities to deliver an unmatched experience to the customers.
In the fintech sector, Blockchain helps in simplifying the KYC process, upgrading various processes in the stock exchange market, ease up the process of distributing loans, and other activities. Read the complete article to know the same in detail. On the other hand, if you are looking out for finance app development services, then reach out to a reliable Blockchain app development company like Quytech.