Legislation and regulation seem to have inoculated the banking industry against technology disruption over the years. Today’s industry, however, faces the rapid proliferation and broad application of Blockchain technology, and the runaway popularity of digital currencies and ICOs. There is no doubt that this new wave is here to stay, and the world is waiting to see what effect blockchain will have on banking in the future.
The Solution of Banking Issues
The allure of Blockchain technology lies in its ability to address so many problems currently confronting banking institutions. Blockchain improves the security of stored vital information and transmutation, rewards a decentralized and transparent network infrastructure, and significantly reduces operational expenses. These attributes make it a promising solution even in a field as restricted as banking.
Deltec International Group Chairman Jean Chalopin said at the recently concluded Deltec Annual conference in The Bahamas, “Credit and financial organizations need third party intervention to help them perform their daily activities. The application of mediators makes the service of financial organizations very costly. Blockchain, on the other hand, takes a decentralized approach, thereby reducing an institution’s reliance on third parties and enabling it to deliver service to customers at a lower cost.”
Popular Application Cases of Blockchain Technology
Blockchain will transform banking as we know it, especially when applied to the following uses:
Banks and other financial institutions can make use of Blockchain to reduce expenses and improve the speed of bank to bank transfers and international transfers. Big financial companies and independent financial analysts agree that this technology is very likely to replace the current transfer model in the coming years.
Customer Identification System
This technology can be utilized in the banking business to aid in the creation of a decentralized customer identification system. All credit institutions must complete Know Your Client protocols before processing client applications. Using blockchain, a client’s identity may be established on one occasion, and the information stored in a safe location where all banking organizations in the system can access it.
Traditional insurance can be enhanced considerably by automating payment processes on insurance cases. Execution of smart contracts which are completed automatically will eliminate long technical delays, reduce the necessity for human adjudication and boost the efficiency of the claims settlement process.
Soon enough, the sector of banking is likely to harvest the benefits of a methodical approach to applying blockchain to the banking business. This latest technology will augment efficiency, security and speed, and lower costs in the mainstream of bank operations. This will lead to a significant development in the superiority of the services offered to end-users.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
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