Blockchain advantages (part 1): Finance and Banking.
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Hello everybody,
reading my previous articles you’ll have guessed that I’m a blockchain technology and cryptocurrencies supporter… I would call myself a Blockchain/Crypto enthusiast.
Today I would like to launch an article series whose main theme is How Blockchain can benefit you in your daily life; I still don’t know how many parts this series will be made of, but I’ll try to explain even to less experienced users what are the actual advantages that this technology offer.
In this first part I'll talk about its most simple application that is Finance and Banking.
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World banks seemed to have been interested in blockchain since their very first appearance on the market and the reasons why could be quite obvious.
If we think about what is the main role of banks in Financial Systems, that is to manage Fiat currency deposits and their transfer, then it goes without saying that using blockchain to speed up and guarantee the security of these operations seems the most effective choice to make.
Blockchain is the safest and best anti-sabotage register that banks and financial services could use.
Easy and fast transactions and a better back-office management could also mean that banks and all financial institutions could save huge administrative expenses.
Saving that might even reach 20 million American Dollars per year. That is an incredible amount compared to the easy-to-use management of Blockchain and its countless advantages.
The question now is: banks have implemented this technology? The answer is yes obviously.
Swiss UBS and British Barclays are already testing this procedure, verifying directly the benefits I was talking about before and that seems to be enough reason to go on testing.
But they are not the only ones. Surveys from around two years ago among more than 200 banks and financial institutions showed very positive results: at least 65% of banks and 15% of financial institutions mean to develop their own Blockchain business within the next 3 years.
Someone may wonder why it is taking that long to abandon old banking and financial systems in favor of the blockchain technology.
The reasons that lie behind this are simple enough and can be summarized in two points:
- Regulation problems
- Scarce development of this technology
Many countries are trying to regulate the mess created after the blockchain birth but with unsubstantial results. There’s still no common regulation even if things are moving in that direction, because before regulating the brunch it is necessary for blockchain to be recognized as technology in first place.
Anyway it is positive that the regulation process has started because it represents an important boost for blockchain consecration in the financial empire.
The second crucial point for blockchain use is tech related.
There is not a common procedure and this technology is still developing, so banks and financial institutions are discouraged by adopting this technology especially considering the gigantic cash flow involved and perceiving the whole system as untrustworthy.
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Banks and Financial Institutions are actually interested in using this technology even if with they are playing for time to solve the above mentioned problems.
Up to now I’m only speaking about blockchain leaving aside cryptocurrencies because banks have a slightly different and cautious approach toward them.
Blockchain technology may be for banks a good opportunity in terms of savings and cost-effectiveness, cryptocurrencies, on the other side, are considered as a treat to particular privileges that banks want to safeguard.
One step at a time I’m sure that blockchain will become more popular and even part of our everyday life so that people will stop considering it as something obscure.
This first part about blockchain benefits ends here.
Please if you feel like doing it, let me know what you think about this article leaving a comment.
Cheers, Carlo
Source: blockchain4innovation.it
You may find the italian version of this article at I vantaggi offerti dalle blockchain (parte 1): Banche e Finanza
English translation by @elicoz
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Finance and banking system can be benefited from using blockchain technology in various ways such as speed, reducing cost, security and so on. If banks and financial institutions want to survive in the future, they have to accept this technology sooner or later.
Thank you so much @miti for sharing this. Looking forward to reading your next post.
That's exactly what I think. They comply with the new technology or they might quietly disappear from the financial landscape. Thanks for your comment.
I very much hope that soon all over the world will recognize that without a revolutionary technology, the blockchain and cryptocurrency world community will reach a dead end. These technologies can change the world for the better.
keep writing all the parts 👍
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I read your article very well. Your writing helped me a lot.
Please don't copy past your comment to several posts. That might be considered spam.