Blockchain is an innovative crypto technology that enables the way forward for many systems and industries, with the financial industry being the immediate beneficiary.
Real-time inter bank fund verification would unify banks and reduce fees, that might mean quicker wire transfers at a lower cost. Income oversight may be a task fit automation, and therefore the blockchain may be a suitable candidate for the work. These companies are using the blockchain to streamline inter bank transactions.
Payment processes like SWIFT GPI have reduced transaction times to mere minutes. The blockchain could go a step further by enhancing security, transparency, and affordability. Blockchain-powered payment services charge one-hundredth in fees on cross-border payments. They take only a couple of hours to process and account for billions of dollars in international transfers completed.
Financial institutions have taken note, and are educating themselves on the pros and cons of crypto currencies. Some even offer crypto-centric financial management services because the public understands how crypto currencies can diversify assets, high-value clients may urge banks to dive further into the crypto sphere. Banks who suit regulators to pair their strong reputations with cryptocurrency offerings could have a significant competitive advantage.
Financial institutions act as the guarantor of payment between seller and buyer. They issue a preemptive letter of credit to the vendor that’s valid once the customer receives the merchandise. These traditional letters of credit require several intermediaries — banks, financiers, insurers, and credit agencies — that have got to be paid. These moving parts create unmet trade demands estimated to cost the maximum amount as $2.6 trillion. Blockchain technology could help decrease record keeping costs and eliminate some intermediaries while simultaneously weaning trade financiers off of paper-based systems that cost time and money.