10 IMPORTANT USES OF BLOCKCHAIN TECHNOLOGY IN BANKING INDUSTRY
Blockchain technology has constructed hype from the day of its invention and it has gained a lot more attention in the last few years. Because of its transparency and flexible nature, blockchain is being adopted in many industries for its growth and development.

In recent days, the major issues which every banking industry faced for data protection. Blockchain plays a vital role here by increasing trust, transparency, and privacy in data sharing.

Nowadays, all those banking industry technologies are challenged by protecting security. By enhancing trust, transparency, and privacy in data sharing, blockchain technology may aid in the acceptance of digital protection solutions.

Blockchain technology completes its major years of running and still running successfully. This technology starts primarily with cryptocurrency bitcoin. Its big role is to provide a decentralized exchange of records. Blockchain technology has now expanded from finance to include the blockchain sector as well.

Here the most popular 10 important uses of blockchain in the banking sector:

Payments, Especially Cross-Border Payments

Stock Exchange and Share Trading

Trade Finance

Digital Identity Verification

Syndicated Lending

Accounting, Bookkeeping, and Audit

Credit Reports for Businesses and Individuals

Hedge Funds

Crowdfunding (ICOs)

Peer to Peer (P2P) Transfers

Here we explain about each benefit:

Payments, Especially Cross-Border Payments

Payments are the first and premier benefits of any banking and financial system. When it comes to blockchain finance, both central and noncentral banks all over the world are now tapping into this new technology in terms of payment processing and potential issuing of their own digital money. This trend also holds the cross-border payments, which have been powered mostly by Swift or Western Union until now.

Stock Exchange and Share Trading:

As you know, the traditional stock exchange processing time is very high and involves lots of stages and administration and can take up to 3 days. anyhow, the decentralized nature of blockchain technology in banking can remove all those unnecessary middlemen and enable trading to be run on computers all over the world. Never devoted servers unified into an interconnected network.

Trade Finance

Blockchain also plays a major role in the trade finance sector — financial ventures that are related to c international trade (not stock exchange trading). Even in the present day also the disruptive world of technology, many trade finance ventures still involve lots of paperwork, such as bills of lading, invoices, letters of credit, etc. Of course, mostly the order management system permits you to convey out all this paperwork online, but still, it consumes lots of time.

Digital Identity Verification

Digital financial transactions are impossible without identity verification. anyhow, this verification requires a lot of steps to be taken, such as:

Face-to-face verified. Authentication: The bank users need to prove their identity when they login into the service. Authorization: A proof of the user’s aim is needed.

every step needs to be taken for each new service contributor. Anyhow, blockchain makes it possible to securely re-modify identity verification for other services.

Syndicated Lending

Syndicated lending refers to giving loans to individuals by a group of lenders, typically banks (a syndicate). Due to several contributors involved, the traditional processing of such syndicated loans by banks can take up to 3 weeks. Bank has some following challenges of syndicate loans.

Know Your Customer (KYC) — user identity verification.

Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) — legal actions aimed at prevention, detecting, and reporting of currency laundering ventures.

Blockchain financial services can superpower this process and make it more transparent. With blockchain’s ledger, banks within a syndicate can distribute tasks related to local compliance, KYC or BSA/AML and link them to a single client block.

Accounting, Bookkeeping, and Audit

Probably that involves as much paperwork as accounting the traditional way, and it is digitalized relatively slowly. The reason behind that may be in strict regulatory requirements regarding data validity and honesty. Therefore, accounting is another domain that can be modified with the power of blockchain technology finance, from clarifying compliance to streamlining the traditional double-entry bookkeeping. As a result, the records are more transparent and any attempt at forging is almost impractical. Think of it as of an “electronic notary” verifying the transactions. In addition, blockchain’s smart contracts can be used to automatically pay tangled.

Credit Reports for Businesses and Individuals

Blockchain finance can also help separate and small businesses to quickly get loans based on their credit bygone days. It may take a long time for lenders to review the borrower’s loan bygone days. Traditional business credit reports provided by middlemen credit service are not available for small business owners. Beyond, paying companies to entrance their sensitive data sounds strange and insecure. Anyhow, blockchain can provide tools that will allow borrowers to make their credit reports more accurate, transparent, and securely shareable funds.

Hedge Funds

A hedge fund is investing cooperation consisting of a fund manager and a group of investors (limited partners). Anyhow, hedge fund contributors are traders rather than ordinary investors. The purpose of a hedge fund is to maximize investor returns and decrease risks.

Crowdfunding (ICOs)

Crowdfunding requires raising funds by asking a large number of people each for a small amount of money, typically digitized. This industry is a perfect suit for blockchain technology finance. Initial Coin Offerings (ICOs), financial instruments that help to start young cryptocurrencies, are the most known example of blockchain-based crowdfunding. ICO tokens are the same as shares of an organization, though usually without fairness exchange. Instead, the investors buy tokens either for existing cryptocurrency, such as bitcoins or for physical currency, such as US dollars. Later, in case of success, they can sell these tokens on cryptocurrency markets. Like in crowdfunding, funds are raised to implement a concept at the stage when the company has no product.

Peer to Peer (P2P) Transfers

Peer to peer convey, clients can transfer funds from their bank account or credit card to another person’s account via the Internet or mobile phone. The market is full of P2P transfer applications, but all of them have some limitations. The mention before issues can be solved with blockchain-based, decentralized apps for P2P transfers.

The above I mentioned all benefits of blockchain in the banking industry. And also explain about it.

If you need blockchain in your banking industry.
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