Applications and Use Cases

Five Reasons the Financial Sector Wants Blockchain

July 14, 2018

Though its awareness grew thanks to its role as the underlying technology behind Bitcoin and other cryptocurrencies, blockchain has been widely touted as being a potential game changer in nearly every industry. 

The financial industry is already taking a close look, with major global leaders like MasterCard taking a lead in the payment space, including a recent patent filing to put encrypted credit card information on blockchain to reduce fraud.  Back in May, Goldman Sachs confirmed it will be opening a Bitcoin trading operation, and Spanish bank BBVA issued a corporate loan supported by blockchain.

While some question the viability of blockchain in upending business markets, including the financial sector, major players are buying in and laying their claims to blockchain innovation.  Several benefits of blockchain make it a very interesting alternative to traditional financial transaction models and contribute to its widespread interest among financial institutions.

Immutable Ledger – Blockchain inherently provides a tamper-proof, permanent record of transactions, providing an audit trail of any transactions and assurances that data cannot be altered.

Visibility – Because everyone that is part of a transaction has full visibility, blockchain provides much-needed transparency into financial transactions and contracts.

Accountability – Visibility and immutability provide the transparency required to ensure accountability.  If mistakes are made, the source can be easily traced through permanent logs, ensuring not only the appropriate corrective measures can be taken, but deterring errors (intentional or accidental).

Speed – The distributed ledger technology allows immediate processing of transactions, reducing the time for trades, contracts, loans, and other financial transactions to be settled.  In addition, smart contracts are set up for automatic execution once predetermined conditions have been met, saving time and operational costs. 

Fraud Reduction – Because blockchain transactions are permanent and tracked across the distributed ledger, hackers and fraudsters have a much harder time penetrating the system, and attempts to do so can be more easily detected.

This is only the beginning, and we are seeing innovative  businesses – both longstanding financial powerhouses and startups – driving research and development efforts into new ways to leverage blockchain to build more efficient and secure transactional capabilities.

The Blockchain Event will be returning to the Greater Fort Lauderdale/Broward County Convention Center, January 30-February 1, 2019.  Industry leaders, entrepreneurs, developers, and investors will converge on South Florida to discuss everything about blockchain that will help the technology disrupt not only the financial sector, but possibly every business market imaginable.

I hope to see you there.  Speaking, demo, and sponsorship opportunities are available.  

Edited by Erik Linask



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