Tue, 27 Feb 2018
Blockchain technology is completely transforming the function of traditional financial institutions, from how payment transactions are made, to how money is raised on the private market.
The centralised data that banks use, is the reason delays are experienced when transferring money. The processing and confirmation of every detail in the transaction is needed to transfer money from one account to another. Due to its distributed ledger, blockchain allows the other side to receive the transferred money from the very moment it is transferred and simultaneously update the database for all the parties.
Blockchain brings everyone to the highest level of accountability by ensuring that the data is reliable, secure and well synchronised amongst all the participants in the transaction. There are no missed or delayed transactions, no human or machine-made errors; no transactions are done without consent from all the parties, or any mismatch and discrepancies in the past data. Blockchain as a mechanism is totally transparent and incorruptible.
Blockchain’s ability to assess many different data points without actually revealing the information, means that banks can closely track the required information and run computations on it without taking the risks of storing the information themselves.
It is indisputable that the relationship between banking and blockchain will remain harmonious. Head of Innovation for State Bank of India Sudin Baraokar predicts “By 2030, traditional banking services could cease to exist with Blockchain. All services of banks can be replaced by Blockchain.”
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