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Retail Business Review | Thursday, April 07, 2022
Blockchain technology which achieved prominence after the much-hyped Bitcoin ecosystem, has encouraged the interest of the banking and financial sector. It has become one of the prolonged techniques and has found a keen audience in the banking sector because of the promise of high efficiency, productivity, and cost.
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In addition, the industry has witnessed the ''shared ledgers transformation, and now this technology is being experimented with to leverage and transform global retail banking.
Smart Contracts
Blockchain innovation has the potential to give a universally distributed system that several retail banks can use to share and keep a record of the transactions, invalidating the need for central authority on the Internet.
In addition, smart contracts, one of the applications of blockchain technology, promise to bring transparency to the process and eliminate the need for a third party. For example, the shared copies of legal agreements would fasten up the funding process and reduce the time from contract exchange to completion.
Know Your Customer
Banks spend huge amounts on Know Your Customer (KYC) annually for security purposes. Nevertheless, blockchain allows independent verification of one client by one organization that can be further accessed by another organization so that the KYC process wouldn't have to start again, thereby reducing the burden on the banks. Therefore, the startup companies focus on building blockchain systems for KYC chains, customer identification, and other purposes.
Cross-border Payments and Crimes
This process is more expensive than the domestic ones. Blockchain can help speed up this process, cutting out the reliance on a third party and significantly reducing the costs. Furthermore, the more seamless global and domestic payment mechanisms are the more businesses and households benefit.
Blockchain technology can eradicate some current online crimes as it verifies every single bit of data in a transaction. During any fraudulent activity or breach, the technology would immediately know all the parties who have permission to access the shared ledger.
The varying global scenarios and financial markets need technology like a blockchain to ease the transactional procedure and reduce costs. Therefore, blockchain is supposed to significantly impact the retail sector in the coming years.
See Also : Banking Technology Companies
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