April 24th, 2018
Blockchain technology is slowly making its way to traditional banking systems, thanks to its unique concept that will make transactions safe and cost-efficient. Compared to the banking systems or services, blockchain technology has a lot to offer. But does that mean blockchain technology will kill off traditional banks and their systems? It’s tough to comment on that at this stage, but it’s true that blockchain technology will be used in every financial institution in the future. Use of new technology provides a better experience, but that doesn’t necessarily mean it will kill banks or financial institutes.
One of the most crucial sectors, the financial sector, has and will always have certain regulating authority or power. No system or thought process favors the funding for terrorism or human trafficking, so the biggest requirement is the enforcement of laws that will prevent those type of criminal activities from occurring.
It is to early to know if this innovation will possibly cause destruction, it was created for the betterment of people and it is not meant to be a destructive force. Similar to the internet, blockchain will pave the path towards opportunities for all these new ventures and businesses. The banks and businesses that will be able to capture this innovation, will be successful in emerging as a strong and relatively better service. So every person using banking services can expect to get better services and opportunities with this new technology. Those that will not be able to capture it, for what it can be used for, might struggle. It is important to understand the new technology that will help offer better services, the same holds true for blockchain technology. The market is highly competitive and you need to stand out from the crowd to get noticed. Innovation creates fresh opportunities, they cannot be referred to as destruction.
With blockchain technology in the scene, many people think that banks will all but die out because of it. But it may actually turn out to be a blessing in disguise for the banking sector. The blockchain technology will hopefully turn out to be a HELP for the banks, it will not kill the banking sector. Banks are extremely strong as well as reliable entities. They provide advantages to the governments for certain protocols like KYC, AML. Banks are not only an intermediary. The entire banking system was designed many years ago. It has to adapt to the modern and the new technologies, as that is one of the essential factors in the entire competitive market and there is a strong demand for any new technology that enters the market.
The blockchain is a distributed database, input is captured into blocks and each of these blocks is chained. Eventually, this new concept eliminates the requirement of third parties. Each transaction is verified. Cryptography secures the blocks. Here just some of the reasons why banks should use this technology: