Finance leaders must be keen to monitor the ongoing trends in technologies across various sectors as this can be significant in their decision-making process for their organisations.
Among these trends is the banking sector's observed race to adopt and explore blockchain.
Although there have been projections that the market value of blockchain will skyrocket in the coming years, lenders are being careful as there are not many ways to use blockchain in the sector just yet. Apart from this, related rules are in the way, although they are slowly trying it out on a small scale.
It is important to first understand the prevailing issues in the current banking system to acknowledge the benefits of blockchain in the sector, as years passed have rendered traditional banking somewhat stagnant, marked by sluggish adaptation, reliance on paperwork, security vulnerabilities and time-consuming processes.
The need for change in the banking sector is and the blockchain technology can contribute a big difference in processes such as paying money, making it faster and without extra fees.
Cryptocurrencies that are built on public blockchains, facilitate real-time, fee-free transactions. The technology also simultaneously helps with settling and clearing transactions faster and with more transparency.
On top of these, blockchain is also altering how stocks and loans work, making a digital database that does not need lots of middlemen.
In addressing Know-Your-Customer procedures, blockchain stores customer information securely, significantly reducing the time and costs associated with verification processes.
The technology is not widely used a lot in banking yet, but it is showing its potential in real situations, albeit that the adoption is a slow process--blockchain is poised to change how banking works in the future.
