Trending topics in the financial service industry are blockchain technology. We will analyze that blockchain technology will have an impact on the financial organization. Due to blockchain we used to create virtual currency or using decentralized network we used to recording and updating of customer identities to the clearing and settlement of lands and securities.
Impact of Blockchain Technology in the financial sector
With the block-chain technology in the financial sector, we used to easily transact between two countries by taking less time. It can execute commercial transactions and agreements between the user and remove the mediator.
Security and Reliability
Information is not leaked or transferred to anyone, transparency of transactions and less reliability on cash due to blockchain technology there is more security between the financial organization and user.
Blockchain technology is cost-effective in the financial organization it saves the cost of checking or rechecking of transactions and allows you to trade of shares accuracy, and a shorter settlement process.
A blockchain is made up of two primary components: a decentralized network facilitating and verifying transactions, and the immutable ledger that network maintains. Everyone in the network can see this shared transaction ledger, but there is no single point of failure from which records or digital assets can be hacked or corrupted. Because of that decentralized trust, there’s also no one organization controlling that data, be it a big bank or a tech giant like Facebook or Google. No third-parties serving as the gatekeepers of the internet. The power of blockchain’s distributed ledger technology has applications across every kind of digital record and transaction, and we’re already beginning to see major industries leaning into the shift.
HOW BLOCK CHAIN IS SET TO TRANSFORM FINANCIAL SERVICES
Accounting for value – New corporate governance
Distributed ledger will make audit and financial reporting real-time, responsive and transparent, improving the ability of regulators to scrutinize corporate financial actions.
Funding and investing in assets – New models for peer-2-peer financing, and recording of corporate actions such as dividends paid automatically through smart contracts.
Lending value- credit,mortgages,bonds
Debt can be issued, traded and settled on the blockchain, increasing efficiency and improving systemic risk; the consumer can use reputation to access loans for peers.
Storing value – financial assets such as currencies and commodities
Payment mechanism combined with a reliable, safe store of value reduces the need for typical financial services; savings and current accounts will become obsolete.
Moving value – payments, transfers, and purchases
Transfer of value in very large and very small increments without an intermediary will dramatically reduce the cost and speed of payments.