Can Blockchain Replace Banks?

April 25th, 2018

Blockchain technologies are now one of the most discussed topic and come with wide range of facilities and features. Compared to traditional banks, blockchain has a lot to offer, making it ideal for all types of transactions. The blockchain is a distributed ledger technology, that can be used in many places at once, where smart contracts and transactions can be executed, without involving any type of middleman. This is one concept which may simplify investments, thereby turning all complicated processes into just a few simple clicks. In the future, real estate transactions, as well as mortgages, will be handled on the blockchain.

Banks Need To Adapt

Blockchain technology has definitely got all of the features that will rule the financial sector, but it’s too early to assume that it will replace banks. Seeing such long drawn benefits of blockchain technology, it is becoming important for banks to adapt. As of now, it’s difficult to know whether the blockchain will remove banks from the process, but one thing is sure-it will make banks more efficient.

What Can Blockchain Do?

Theoretically, almost every element of banking transactions, can be handled on blockchain technology. Whether you want to buy a piece of real estate, transfer money or are in need of any banking services the blockchain technology will carry out the task in faster, cheaper and more efficient way. All deals and transactions are recorded on the blockchain registry, soon, it will be adopted by many jurisdictions.

Experts have started promising that this new technology will replace clunky banking services and registry processes, so those days will be in the past, where people had to visit a local bank or find the right clerk to help them with their documents. This new technology will simplify the process and make it easy for everyone to use. It will be a challenge for so many banks and financial institutes to accept this new technology, but they will have no other option in just a few years.

Experts believe that blockchain technology will simplify the process and make it easier for people. Rather than seeking the help of LLCs and dealing with legal, tax and accounting issues, blockchain technology will make the process seamless by bringing in new techniques. What’s more, the blockchain technology, combined with various smart devices, will help investors track the condition of investments and know if things were repaired or replaced on schedule. Individuals will get updates in real time and this will help to eradicate all complexities associated with the present system. Blockchain technology will remove the need for third-party interference; you can blindly trust the system.

What Should Banks Do Now?

Blockchain technology will take over transaction and recording activities that traditional banks do today. It is time for the bank to focus on adding value to their services. Now it is not only about lending money, the bank needs to play a role in managing the property and helping people do many things. It’s time for financial institutes or banks to reinvent themselves and find new solutions and services.

Banks should start implementing this new technology as soon as possible, they can start experimenting with tracking documentation, creating records and verifying the transaction using this new technology. The financial crisis showed that recordkeeping is not the only aspect for lots of financial institutes or banks. Blockchain technology creates reliable storage facility which can be accessed based on a public or private chain.

All documentation can be stored safely; processing can be done automatically-going forward. Payments could be made and foreclosure would occur easily – all these things are all possible on the blockchain technology. This is true for auto lending, debt collection, all other types of loans and other related services.

It’s time for banks to act and try to bring in necessary changes in due time, else they might get replaced with something new and advanced.

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