Satoshi Nakamoto came up with the idea of a “blockchain” in 2008, and he came up with a digital currency called “Bitcoin.” That was long ago, but Blockchain has been a significant change in the BFSI industry. A blockchain is a group of blocks where information is stored, and each block is linked to the one before it. This makes it easier to verify and group the information in these blocks. Fortune says that Blockchain is expected to be worth more than $21.7 billion by 2025.
Early adopters: BFSI was one of the first to use this technology, and now banks worldwide are using it to make sure that transactions are safe. Crypto giants like Ripples are working with banks and the government to get Blockchain used by people worldwide.
There is no intermediary. There is no transaction cost because there is no intermediary.
• Only tool for centralizing, decentralizing, and distributing information • Less money for employee training
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In this example, banking is compared to blockchains. Is There a Third Choice?
The “future of money” will be run by whose power. Both have good and bad things about them. There are some things that only a banking system can do, even though it doesn’t have a lot of new ideas. On the other hand, cryptocurrencies are unique and have a lot of fault tolerance, but they haven’t been trusted by the banking system yet.
So many people who are very excited about cryptocurrencies believe that Blockchain will change the way we do business with money. To think about which options are good, think about whether there is a third choice. It is called “Hybrid Blockchains.”
They are between private and public blockchains. Banks can use this new technology to make safe and secure money transactions. Many people use hybrid blockchains, such as XinFin, Ripple, and the XRP token. These are some of the most well-known.
Earlier this year, JP Morgan’s start-up called Kadena said that in January 2020, it would be launching a hybrid blockchain solution that would help its users get a lot more out of their money. On the other hand, hybrid blockchains want to help banks process more money and make money transfers easier and faster for people.
“Outside the Box” Blockchain Trends
Blockchain in the BFSI, which is also called “FinTech blockchain,” has become very popular and well-known worldwide. This area is getting a lot of money. Trends like combining Blockchain with AI and IoT are likely to happen in 2020, but some weird trends are also.
Long Island Iced Tea, a well-known beverage company in New York, has changed its name to Long Blockchain Corp. The company started to invest in Blockchain while still making iced tea for its clients.
According to the report, BFSI made up 41% of the share and is expected to be the dominant player in the blockchain market through the next few years. Blockchain technology is being used in many ways in the BFSI industry, from secure payments to “smart contracts” and other things. These days, there are a lot of cyberattacks and frauds in the world of money.
For example, KYC, fraud detection, trading platforms, and other services make it easier for banks to forget about the old ways of banking and start using this new technology to start using it. Blockchain is a system that protects everything, improving the cybersecurity of businesses in the BFSI industry.
Last few years, there have been remarkable changes.
In January 2020, BlackRock and Goldman Sachs plan to buy a stake in Chinese banks because many Chinese banks invest a lot in blockchain projects.
There will be a new trade finance platform called we. trade launched in January 2020. Users will be able to make money transactions with a simple interface when this new service is launched. Another group of banks, including Deutsche Bank and KBC, Nordea, Natixis, Rabobank, SocGen, UniCredit, and Santander, also found the same platform.
When Orpic Group and Oman Oil made their first trade on the Blockchain in January 2020, it was a big deal.
Traditional methods would take about 5 to 10 days, but this transaction was over in just 24 hours. This deal will also open doors for other businesses in the years to come.
In July 2019, HSBC said it would use Voltron’s blockchain trade finance platform to make the Line of Credit (LoC) process between countries like China and Australia more efficient.
Many people are going to stop being skeptical about the Blockchain soon.
While banks and insurance companies are playing around with Blockchain, some people aren’t sure about this new technology. This is what these businesses have done.
They’ve chosen to be safe rather than sorry. Even though Blockchain is changing the banking and insurance industry, some people are still not sure what it is or how it changes things.
If you don’t know much about or trust this technology, people are trying to get into it by learning how to digitalize assets with tokens. This is how they’re getting into it. So many people didn’t understand how bitcoin worked at first, but now they’re excited to see Initial Coin Offerings, which allow people to buy new coins (ICO).
It is becoming more and more common for things to be digitalized, and this technology allows assets to be fully digitalized. So, Blockchain is here to stay.
All we demand to do is hire people who have these skills, make people more aware of Blockchain, and let people move from their limited knowledge of bitcoin and cryptocurrencies.
It will be all over the BFSI industry in the next few years because of how Blockchain works.