Banks, banks, banks! Don’t we all just love ourselves some banks? They take our money, then they take our money to give us back our money, to give our money to someone else they... wait for it... take our money, and, of course, they take a lot of our money when we want to change our money for another countries money. Now, I’m not advocating that we run back to the caves and start trading sheepskins for wheat, but when new and better technologies that can benefit the majority arrive, it seems reasonable to adopt them. But the banking system is a well-established one and it isn’t exactly jumping at the opportunity to change. Despite the apparent reluctance, I would like to go over a few of the benefits that blockchain technologies can bring to the world of banking.
When one is at least a little familiar with blockchain, the imminent association is transparency. This is a crucial and important question that banks are already looking into. Where did the money come from? Was it legally obtained? And so on. However, blockchain could simplify this process meaning the unseating of the established bureaucracy and the fees that go with it hand in hand.
Not only the fees would reduce, but the operations would also take less time, which is another important perk that could come with blockchain, especially when more than one bank is involved. These intra-bank transactions can take up to three days, which in 2018 is a lot of days. If banks were to shift to a blockchain system, these operations would become much more efficient.
Blockchain would also significantly lower the number of in-between parties like clearing houses, corresponding banks and others simply wouldn’t be required, which in its turn, as in the previous cases, would increase the speed an operation is processed and decrease the money it costs to process it.
A serious matter in the day of 'thumbprint this', 'password that' and hackings yesterday, today, and tomorrow: identity verification. It would also become simpler, cheaper, and more efficient, hence security would increase. Client information can be stored on the blockchain and accessed in real time and by other banks as well, again, simplifying the verification processes since there is no need to go through the whole procedure again if the info is already on the blockchain.
From identity verification the next logical step is security that is of the utmost importance, that is why banks invest a lot of money to prevent fraud and cyber-attacks. But if every transaction was timestamped and unchangeable, once created then forever there and accessible, being able to trace any fraudulent operations would become significantly easier, which in turn would decrease the number of people who would risk attempting fraud, for when an action has a higher likelihood of repercussions it suddenly becomes less appealing.
And this is all just the tip of the iceberg! There is much more that blockchain can offer banks: smart contracts, a reduction of errors, money-laundering control and others. However there are costs and issues to be resolved, such matters of scalability and regulations, but we must hope that the benefits of blockchain technology will eclipse the ajustments that need to be made.
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