The financial landscape is undergoing a massive transformation thanks to the emerging technologies.
One of these new cutting-edge technologies is the blockchain, and it is anticipated that it will greatly change the way the players in the financial industry handle financial transactions and processes.
The changes will see more efficiency, bring new business models, present new value propositions, and sort out persistent changes.
The technology is expected to be a game-changer although it’s still in its nascent stages and will render some business models irrelevant. Banking could altogether become a thing of the past after becoming obsolete.
Here are some ways how blockchain technology can disrupt the financial landscape:
Reinvent the cash transfer process
Typically, money transfer processes involving national currencies must bring in third parties like banks and credit card companies, which results in administration and transactional costs that are borne by the payer or recipient.
With the employment of blockchain technology for money transfer, there will be no need to have third parties in the process, making it a peer-to-peer transaction without the transaction and administration costs. There will be higher levels of efficiency and productivity and the possibility of microtransactions.
Using blockchain in share and stock trading will come with a bagful of benefits. The process is facilitated by a significant number of third parties such as exchanges, brokers, CSDs, and others, and their involvement makes the processing time-consuming.
Trading of stocks on the blockchain will eliminate some of the third parties, thus making the settlement process more accurate and removing information redundancy as well as enhancing efficiency.
Make parties to transactions accountable
In the current financial systems, the occurrence of any errors or abnormal activity triggers an endless blame game and looping in of so many parties to solve it.
The cause of the mistake could be an individual, the bank, or the company. Extensive investigations are carried out to establish who is to be held responsible for the problem and many third parties are brought on board like regulators, lawyers, the justice system, systems experts, and so on.
With blockchain technology like the one used to trade cryptocurrencies at Nakitcoins, all that is needed is to check the transaction logs. The issue is easily identified as well as the person liable for it. Such fast and simple checking of logs reduces the time and cost of resolving issues.
Easy digital identity verification
Customer experience will change significantly with blockchain technology when it comes to the area of verifying digital identity.
The current online financial transaction process requires so many processes to be taken when verifying one’s identity including a face-to-face check, authorizations, and so on. As if that is not enough, the processes have to be repeated with each new service provider.
With blockchain, it possible to safely apply similar identity verification for other services. Users get to select how they wish to identify themselves and decide who to share their identities with.
Although blockchain users need to register their identities on the blockchain, they are saved the trouble of having to go through the registration for each service provider if the providers are also on the blockchain.
The Bottom Line
Blockchain can and will certainly disrupt the financial landscape, and it is only a matter of time. The technology will change the way of doing things, creates more opportunities, and makes some business models irrelevant.
There will be faster transactions due to the removal of third parties and hassle-free resolution of issues because identifying errors and those culpable will be fast and easy.
The users will also have an easier time identifying themselves in the system as there will be no need for a rigorous identity registration process with each new service provider. Those are just a few ways in which blockchain will disrupt the financial landscape, and there are many other ways.