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Blockchain is powering fintechs with growth and optimization. With broader adoption, implications of blockchain technology can revolutionize the whole financial space.
FREMONT, CA: According to a survey report by PWC, around 77 percent of financial organizations are expected to adopt blockchain technology by 2020. Many fintech companies have already adopted the technology that has been able to create a buzz in many industries. Originally meant as a technology backing the first cryptocurrency, today blockchain has seen an application in many use cases and has the potential for many more. As banks and finance companies evolve through innovative business models and operations, blockchain technology will play a significant role. Fintechs have already offered new-age services that are making them a hit in the market.
The technology of blockchain, functions on the principle of decentralized digital ledgers. These ledgers are used to create a record of financial transactions or any other information to which a value can be connected. These digital ledgers cannot be tampered with or modified. Upon any attempts at modification, there are changes to the links, and this enables easy detection of frauds. The potential of this technology in the financial industry is vast.
Blockchain backed services help firms to cut down on operational costs. Because the technology allows for peer-to-peer transactions and a decentralized system with numerous nodes, users can directly conduct processes without having to pay extra processing fees to central institutions like banks. Its immutability also helps in increasing standards of safety. Preventing cyber-attacks and detecting attempts of fraud is easy with blockchain. Hence, users can expect lesser data breaches. The feature of smart contracts on blockchain gives makes agreements transparent and ensures obligations are fulfilled before the process of the transaction. Thus, the benefits of blockchain for fintech companies are apparent, and this has led to increased funding for such firms.
Many use cases for blockchain technology can already be found today in many countries that have promoted fintechs. In combination with artificial intelligence, blockchain technology has the power to disrupt the traditional business models in older organizations and help integrate automation and security. A quick adoption can help the financial industry add value to its services and enhance customer satisfaction while making processes seamless.