Blockchain technology which gained prominence after the much-hyped Bitcoin ecosystem has stimulated the interest of the banking and financial sector. It has become one of the extended techniques and has found a keen audience in the banking sector due to the promise of high efficiency, productivity, and cost. The industry has witnessed the transformation that the ‘shared ledger’ has brought and now this technology is experimented to leverage and transform the global retail banking.
Blockchain innovation has the potential to provide a universally distributed system that can be used by several retail banks to share and keep a record of the transactions, invalidating the need of central authority of the Internet. Smart contracts, one of the applications of the blockchain technology promises to bring transparency in the process and also to eliminate the need of a third-party. For instance, the shared copies of legal agreements would fasten up the process of funds and reduce the time from contract exchange to completion.
Know Your Customer
Banks spend vast amounts on Know Your Customer (KYC) annually for security purposes. However, blockchain here allows independent verification of one client by one organization that can be further accessed by another organization so that the KYC process wouldn’t have to start again thereby reducing the burden on the banks. The startup companies are focusing on building blockchain systems for KYC chain, customer identification, and other purposes.
Cross-border Payments and Crimes
This process is expensive than the domestic ones. Blockchain can help in speeding up this process, cutting out the reliance on a third-party and also significantly reducing the costs. Moreover, the more seamless global and domestic payment mechanisms are, the more businesses and households will benefit.
Blockchain technology can eliminate some current online crimes as it verifies every single bit of data in a transaction. During any fraudulent activity or any breach, the technology would immediately aware all the parties that have permission to access the shared ledger.
The changing global scenarios and financial markets need a technology like a blockchain to ease the transactional procedure and also reduce cost. In the coming years, blockchain is supposed to have a significant impact on the retail sector.