How Can Blockchain Impact the Future of Finance?
Blockchain or the Distributed ledger technology has taken the entire world by storm. In fact, it has become a game changer for all industry sectors especially the financial sector. While the technology has the potential to reshape the very infrastructure of financial services, it also offers the opportunity to re-imagine the industry.
Since, Blockchain works on a shared ledger model, it not just records each and every transaction but also ensures the sequence and authenticity of information on a network that doesn’t allow the records to be tampered with. Furthermore, the transacting parties have the flexibility to interact with each other in a seamless way thereby removing the need for any intermediary such as Banks.
With this the need for reconciliations is not just eliminated but quick settlements are available to all the participants. Apart from this, visibility into all sorts of relevant transaction including supply chain, accounts payable and receivable is also provided. Listed below are some of the compelling ways in which Blockchain can transform the future of Finance. Offering greater levels of data transparency, quick information access and functionalities like smart contract, here’s what fintech firms can gain by leveraging Blockchain:
Improved Efficiency: Since, Blockchain does away with the need for reconciliation, participants present on the ledger get a single version of the truth, which increases the efficiency significantly.
Reduced Loss Due to Fraudulence: Since, financial data uploaded on Blockchain is immutable and cannot be tampered with, data integrity is ensured. This also reduces the risk of fraudulent activities, which otherwise might have led to significant losses.
Provide Better Customer Service: Fintech businesses that are leveraging the tremendous potential of Blockchain for sharing data with their customers may find themselves at the forefront of customer service by providing them with better service while discovering new sales opportunities.
Better Capital Availability: By having a Blockchain solution in place, Finance companies can enjoy quicker settlement of trades. This reduces consumption of cash, which can be used in better business growth.
Blockchain in finance sector is poised to revolutionize the way financial transactions and processes were undertaken. In fact, it promises to eliminate the loopholes of the current system in the most efficient and transparent way.