How Blockchain is Changing the Banking Industry

TALHA TAMBOLI | June 28, 2021 | 50 views

blockchain in banking

How Blockchain is Changing Banking and Finance Industry

We all have basic knowledge about Cryptocurrency and Blockchain technology, and many peoples understand its complex structures and its valuable benefits for the future. That's why many peoples believed that it's the future of currency exchange. Apart from Cryptocurrencies like Bitcoin, Dogecoin, Etherium, etc., Blockchain has the potential to use the existing technology up to its peak to exchange transaction information and data. With more security and easy to trace back previous transactions benefit, we can say it is the new age of Electronic currency to avoid human errors and frauds.

Blockchain technology in Banking


Around the many conspiracies and fake theories about Blockchain and Cryptocurrency, many organizations and even countries like Australia, China, Japan, and other developed nations embraced this Blockchain in Banking as a future of seamless exchange of transactions.

Apart from that, its decentralized transactions are easy and more secure than we have today. Blockchain could change the current banking technology used by its admins to trace and track the record of every exchange of digital money to lessen the frauds and reduce the time and human efforts.

Prominent players of the Bank and Finance Industry like the Bank Of America, JP Morgan Chase, Citi Bank, and other renowned players of finance sectors using Blockchain in banking to improve funds transfer between banking institutions globally and maintain every record of their history of transactions effectively.

How Blockchain is helpful in Banking


Blockchain technology is a decentralized ledger of transaction which enables the bank to keep track of all the transactions publicly and transparently. It provides a direct connection between the sender and receiver of payments. No intermediary and complete control of the transaction exists in between them. Because of this reason, it provides a way for financial services to work more specifically and without errors to make payments securitization more precisely. This makes Bitcoins that uses Blockchain technology a better option of investment.

Benefits of Blockchain in Banking


As you continue to read this article, you might have an idea about this new age technology's immense benefits in the finance sector. Let's take a look at how it can be more helpful in the upcoming future.


Security:


The primary concern of 21st century’s banks is their security. No one knows who will hack their systems and scatter with the money of people who trust the financial system. With Blockchain technology, security issues such as suspicious activities are easily tracked. It is hard to decode the encryption of the Blockchain and takes too much time because the data is not stored on one server but across a huge network of computers. These computers constantly check and verify the records and data. This feature allows a noteworthy use for Blockchain in banking. For a hacker, it is hard to breach many servers.

Every transaction that gets recorded in a Blockchain ledger undergoes complicated sets of encryption interconnected with the next block, which results in an unaltered series of coded data "blocks," each dependent on a ledger series. That's why it is one of the best cyber-protection against hacks in this internet world.

Fast transaction:


If you want to transfer money to someone living in another country, you go to the bank and might have to stand in the long queue for your turn. Once you forward your request, it takes 5 to 10 days to credit the amount in the bank of the recipient. Blockchain can easily reduce such a long time-consuming process. It has the potential to complete the transaction within minutes, not in a day. It saves your valuable time, though.


Easy to track and transparency:


No doubt that it is a highly transparent and traceable system as compared to the traditional finance system. Every record of amount can be easily tracked with a digital recording system.  It reduces the need for time-consuming and costly third-party verification tools. Also, it undoubtedly offers visibility into the transaction history within the banks' operations.


Reduce fraud:


It can reduce hacking, DDOS attacks, and other scams. Blockchain helps banks to identify their user's IDs and confirm their detail with digital Blockchain ID. It automatically reduces future frauds, which is the biggest concern of the banking system.

How bank can use Blockchain:


With Blockchain in banking, financial institutions would not need to depend on the network of custodial services and regulatory bodies like SWIFT. They can easily settle transactions directly on a public Blockchain.  Here are few benefits of using the new-age technology.


Verifying Digital Identity: 


Banks can't process online transactions without the verification of a person. This process can be done via face-to-face verification, logging in with passwords, or sending OTP on registered mobile numbers.
Although, after the application of Blockchain technology, this process becomes more seamless and more secure due to its accurate data reading capability.


Smart Contracts:


It might be possible to automate the process of transaction, which costs time, added complexity, and delays the transactions using smart contracts. It is a contract with terms and agreements between the buyers and sellers' business.  This computerized contract permits the trustworthy transaction completely free from any central authority or external enforcement mechanism. The new way to do business is here.

Faster lending:


Loan processing takes too much of the user’s valuable time. It can be reduced with Blockchain. This use of the technology is called Blockchain lending. Blockchain lending can give direct benefit to customers by reducing the growing costs. It provides lenders with a competitive offer and helps them do the transaction faster and without any security defect.  Blockchain-based Smart Contracts ensure that loan seeker and lender agree viable and fair terms regarding proof of funds and payment planning for future installments.


Blockchain technology has lots of advantages and revolutionary benefits to finance and banking institutions. Though, still, people are generally unaware of this technology and fear of adapting to it. This might cost us time to unify our currency and have a better future.

Frequently Asked Questions:


How is Blockchain used in finance?

Blockchain technology can improve finance and lending services by lowering counterparty risk and shortening issuance and settlement periods. It enables: authenticated paperwork and KYC/AML data, reducing risk exposures and facilitating real-time financial document verification.

What is an example of Blockchain?

Bitcoin is a well-known example of Blockchain in operation. This is a type of digital money (commonly called a cryptocurrency). This electronic form of funds may be transmitted safely from user to user without the need for intermediaries. In other words, there is no requirement for a central bank or administration. Bitcoin isn't the only currency that uses Blockchain technology.

Where can Blockchain be used?

Blockchain uses extend well beyond cryptocurrencies such as Bitcoin. With its capacity to increase openness and fairness while also reducing businesses' time & expense, the technology influences a wide range of areas, from contract enforcement to making government run more effectively.

What software is used for Blockchain?

There is multiple software available in the market for Blockchain technology; some of them are:
Solidity is one of the most widely utilized programming languages among Blockchain developers. Geth is a Go-based Ethereum node implementation. Mist is the authorized Ethereum wallet created by Ethereum's makers.


Is Blockchain the future?

Blockchain technology has several uses in a variety of sectors. Blockchain is already being utilized to help with identity management, smart contracts, supply chain analysis, and many other things. The full potential of Blockchain technology is unlikely to be realized. Till then, it is safe to assume that Blockchain is the future of the Fintech industry.

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Article | April 29, 2022

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After this, study and get profound customer insights with the help of a third-party customer database to obtain accurate customer information such as: Demographics Online and offline purchases Digital consumption Online interactions Cross-device information according to the usage of personal devices By identifying these parameters, marketers can effortlessly create a community for their highly engaged customers. In this way, marketers can include value-proof hyper-personalization methods to reach out to customers and fulfil their expectations in banking. Lead Generation & Nurturing For lead generation and nurturing, marketers should activate paid search, paid/owned social media, and affiliate sites using intelligent and real-time customer data. This will help understand the effectiveness of the platforms in generating potential leads and nurturing them in the best ways. A Data-Driven Path Banks using customer data can monetize it by differentiating between actionable and non-actionable customers. Even so, they can conduct data-driven optimization (DDO), a measurable approach when banks interact with their customers. This approach includes monetizing and identifying customers’ behavior patterns and optimizing their decision-making processes faster and more accurately. In addition, data-driven optimizations range in different types and sizes—for example, new features, CTAs, pricing, page flow, navigation, and templates. With the help of these, marketers can get a lot of data and use hyper-personalization strategies accordingly. A Hybrid Environment Given the current situation, banks should prioritize intelligence by implementing a security-rich hybrid cloud for their hyper-personalization in their banking processes. With this in place, banks can efficiently, inexpensively, and rapidly deliver hyper-personalized services to customers under a hybrid setup. For this, banks should have a robust data analytic infrastructure that can filter the most operational customer data. Prominent Examples of Hyper-Personalization in Banking American Express Sends Videos to Increase Engagement American Express’s business model includes hyper-personalization of its customers globally. We’re delegating much deeper hyper-personalization at a company level.” Harry Mole, Director of Marketing at American Express American Express demonstrates its commitment to hyper-personalization by creating videos for its customers. For example, it makes videos accompanying a customer's monthly credit card statements. The video helps customers explore and learn new ways of managing their credit shares. It also helps them learn about account creation for new customers, share financial tips and tricks, and introduce new rewards. These activities further help consumers maximize the benefits of their American Express account. Since using a hyper-personalization strategy, American Express has seen a threefold increase in marketing conversations and a considerable decrease in the cost of acquiring new customers. Edward Jones Uses Personalization to Increase App Downloads Edward Jones, a financial services firm, offers a mobile app that allows customers to easily access their accounts and investment options. The app effectively conveys the benefits of security and convenience and is equally friendly. Edward Jones initiated an email campaign to encourage customers to download and engage with the entire app. It added a messaging section for app users and highlighted services such as tracking investments, depositing checks, transferring funds, and more without visiting a branch. Frequently Asked Question What do customers expect from their bank? Customers need assistance and want their needs to be understood by their banks. They do not prefer a generic approach to services. They prefer a more customized and solution-driven approach. How is the hyper-personalization approach implemented in banks? Hyper-personalization in banks can be implemented in the following ways: Compile essential customer data and utilize it to create strategies Create hyper-personalized content according to the customer base Distribute the content across channels to reach customers Why is personalization important in banking? According to a study by Gartner, 67% of customers are unaware of the services and products their banks offer. So, with the help of personalization, they can easily connect to banks’ offers, benefits, and services. This is where personalization comes into play.

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PPS

PPS is a specialist financial services provider for graduate professionals. With over 250,000 graduate professional members, PPS is the largest multidisciplinary group of graduate professionals in the world. Members include lawyers, doctors, accountants, engineers and other professionals...

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Paystand | August 18, 2021

Paystand, the blockchain-enabled payment network for business, today announced another year of record-setting growth, with payment volume over its network accelerating past $2B. By doing so, Paystand becomes the fastest B2B payment company to reach this milestone, which comes amidst the larger fintech movement toward an open financial infrastructure. “There’s no question that blockchain is the unstoppable future for every essential business function, and Paystand has been pioneering blockchain applications for enterprise since 2013,” said Jeremy Almond, Paystand’s co-founder and CEO. “In the same way that the birth of the internet led to a universal shift in the way we produce and consume information, blockchain has the ability to transform every aspect of how we do business. We’re excited to make that transformation a reality in the realm of B2B payments.” Paystand’s rapid growth has continued throughout the pandemic as a direct result of the company’s ability to streamline essential accounts receivable (AR) tasks for finance teams, including automating cash application, reducing DSO by as much as 62% by offering embedded “pay now” buttons for email invoices, and digitizing cash flow management. Now, Paystand has been named to the Inc. 5000 list for the second straight year, and is growing at nearly 2x the median for all companies on the list – underscoring its impact in transforming B2B payments and commercial finance. Driven by a flat-rate, Payments-as-a-Service business model that creates a predictable cost structure for AR, Paystand has built the first real alternative to today's monopolistic card networks and paper-heavy processes: a B2B payment network that delivers unrivaled speed, security, and cost. Paystand’s growth acceleration over the past 12 months – due largely to the superior economics its payment network offers businesses – is evident across all areas of the company: “As our team continues its growth rate of 100%, we will continue to hire top talent that’s dedicated to rebuilding our financial infrastructure from the ground up,” says Aliyah Nance, Paystand’s VP of People. “Being named to the Inc. 5000 list for the second year in a row highlights Paystand’s position as the leader of the next wave of fintech, and we’re looking forward to expanding every facet of our organization with individuals who are dedicated to our mission.” About Paystand Paystand is on a mission to create an open commercial finance system, starting with B2B payments. Using blockchain and cloud technology, the company has pioneered Payments-as-a-Service to automate the entire enterprise cash cycle. Paystand makes it possible to digitize receivables, automate processing, reduce time-to-cash, eliminate transaction fees, and enable new revenue. Paystand has been consistently recognized as a top innovator in enterprise financial services and was named to the Inc. 5000 list in both 2020 and 2021.

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NEM Introduces Symbol, the Next-Gen Enterprise-Grade Blockchain Platform

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Paystand Leads the Blockchain for Business Movement, Surpassing $2B in Payment Volume Over Its Zero-Fee B2B Network

Paystand | August 18, 2021

Paystand, the blockchain-enabled payment network for business, today announced another year of record-setting growth, with payment volume over its network accelerating past $2B. By doing so, Paystand becomes the fastest B2B payment company to reach this milestone, which comes amidst the larger fintech movement toward an open financial infrastructure. “There’s no question that blockchain is the unstoppable future for every essential business function, and Paystand has been pioneering blockchain applications for enterprise since 2013,” said Jeremy Almond, Paystand’s co-founder and CEO. “In the same way that the birth of the internet led to a universal shift in the way we produce and consume information, blockchain has the ability to transform every aspect of how we do business. We’re excited to make that transformation a reality in the realm of B2B payments.” Paystand’s rapid growth has continued throughout the pandemic as a direct result of the company’s ability to streamline essential accounts receivable (AR) tasks for finance teams, including automating cash application, reducing DSO by as much as 62% by offering embedded “pay now” buttons for email invoices, and digitizing cash flow management. Now, Paystand has been named to the Inc. 5000 list for the second straight year, and is growing at nearly 2x the median for all companies on the list – underscoring its impact in transforming B2B payments and commercial finance. Driven by a flat-rate, Payments-as-a-Service business model that creates a predictable cost structure for AR, Paystand has built the first real alternative to today's monopolistic card networks and paper-heavy processes: a B2B payment network that delivers unrivaled speed, security, and cost. Paystand’s growth acceleration over the past 12 months – due largely to the superior economics its payment network offers businesses – is evident across all areas of the company: “As our team continues its growth rate of 100%, we will continue to hire top talent that’s dedicated to rebuilding our financial infrastructure from the ground up,” says Aliyah Nance, Paystand’s VP of People. “Being named to the Inc. 5000 list for the second year in a row highlights Paystand’s position as the leader of the next wave of fintech, and we’re looking forward to expanding every facet of our organization with individuals who are dedicated to our mission.” About Paystand Paystand is on a mission to create an open commercial finance system, starting with B2B payments. Using blockchain and cloud technology, the company has pioneered Payments-as-a-Service to automate the entire enterprise cash cycle. Paystand makes it possible to digitize receivables, automate processing, reduce time-to-cash, eliminate transaction fees, and enable new revenue. Paystand has been consistently recognized as a top innovator in enterprise financial services and was named to the Inc. 5000 list in both 2020 and 2021.

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NEM Introduces Symbol, the Next-Gen Enterprise-Grade Blockchain Platform

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