Several new potential applications of Blockchain are being proposed every day. Undoubtedly, it’s the global banking system and finance sector that could benefit the most from the implementation of this digital-ledger technology. Blockchain will revolutionize how payments are made, claims are settled or compliance are made. This technology will create a decentralized, immutable, cost-effective and secure banking ecosystem.
Currently, there are a few companies who are disrupting the global banking industry through implementation of blockchain technology. Here are practical use cases of blockchain in the finance and banking sector:
- The financial-settlement solution powered by blockchain will prevent frauds and scams
- Banks are joining in droves to implement blockchain technology to improve their cross-border payment transactions
- Banks are adopting the blockchain solution for payments as they want to stay ahead of the curve
- It will help to boost the speed, efficiency, and cost of the countries’ remittance corridor and will drastically reduce the time of payments between the nations.
Inter-bank Blockchain Group for Global Payments
The Blockchain will facilitate the creation and maintenance of payment-transaction rules among various banks and financial institutions formalizing standards for money transfers.
Utility Settlement Coin
The utility settlement coin major will settle financial transactions at the speed of light using blockchain. This will reduce the time, cost and capital, improving the overall financial-market efficiency. As a result, it will enhance the speed and efficiency of settlement systems, reducing the time of bank transfer of values and assets.
Record and Transmit Payment Instructions
Smart contract enabled blockchain will record and transmit payment instructions in order to facilitate straight-through payment processing, creating an automated reconciliation mechanism.
Streamlining Payment Transactions between Multiple Parties
Liquidity of private securities would seemingly improve by streamlining payment transactions between multiple parties.
End-to-End Transaction Process for Private-Company Securities
The blockchain empowered financial sector will include a seamless, end-to-end transaction process for private-company securities; direct access to global payments. This will increase the operational efficiency and ease the reconciliation with real-time visibility of payment-transaction activity.
Transformation of Trade Finance
Adoption of blockchain will upgrade the trade finance in terms of cost and efficiency. Furthermore, it will offer a standardized interface, for inputting the details. It will result in reducing the costs and complexity of existing processes, will give easy access to funds.
Simplify and Expedite Procedures of Guarantee process
Blockchain adoption in the banking sector will strengthen the security and will reduce the costs involved for both the customer and the bank. The complete process will become paperless, which will make the flow of information between banks and customers seamless. Transparency will reduce the potential for forgery, reducing the entire length of time taken to complete the process.
Technology for conducting and settling transactions
A corporate-bond platform that uses smart contracts to issue and redeem bonds, the trade-finance collaboration will better track invoices and avoid invoice duplication.
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Blockchain will disrupt the existing banking processes as the adoption of technology is coming to an end, one should expect its adoption in real-use cases to begin to pace up.