Blockchain Use Cases in Banking & Finance | Blockchain Applications in Banking

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5 Thought-Provoking Use Cases Of Blockchain In
Banking Finance Sector
Image source Blockchain technology has a huge
crowd around it that cherishes and admires its
capabilities. Though, banking and finance
industry experts share a great devotion for this
technology. By 2018, 90 of European and U.S
financial and banking institutions have started
blockchain technology adoption. The major reason
behind it is that this technology is able to
reduce the cost of banking infrastructure by
30. However, for many people, blockchain
technology in banking and finance has become a
matter of doubts and worry. Some people don't
know about the usage of this technology and
wonder why this technology is growing popular in
the banking and finance sector.
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Image source Since the blockchain market is
envisioned to grow up to 20 billion annual
revenue by 2024, blockchain in banking finance
may significantly grow. In short, this technology
will be a major transformation strategy to
improve the banking finance landscape in the
future. Are you wondering the same? Let's find
the answer. Reasons Behind Growing Popularity
Of Blockchain In Banking Finance There are
various aspects that support the idea of
blockchain technology implementation in the
banking and finance industry. But some are very
prominent in nature that have boosted the
popularity of blockchain in banking and finance.
Here take a look at them

• The Arrival Of Cryptocurrency
• Cryptocurrencies are a major triggering factor
  behind the popularity of blockchain. Before the
  arrival of bitcoin, hardly anyone knew about this
  technology. But! When bitcoin grew popular,
  everyone got curious about the technology behind
  it, and people learned about blockchain
  technology and fell in love with it.

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• A Secured Infrastructure
• Blockchain technology's infrastructure is another
  reason for its popularity. Being a distributed
  ledger system, this technology is based on
  cryptography, where each block is connected in a
  chain through cryptography. This makes this
  system highly secured and immutable it means
  any changes in actual information can be traced
  easily.

• Image source
• Cheaper Independent Money Transfers
• Another reason for the popularity of blockchain
  technology in financial services is the reduced
  cost of money transfer. Blockchain-based money
  transfers don't require any third party
  authentication, which automatically bears less
  cost. Altogether, transfers made on these
  platforms are private that can not be traced or
  scrutinized.
• So, these are the three major reasons behind the
  popularity of cryptocurrencies these days.
  However, the biggest dilemma arises when banks
  and financial institutions have to decide on
  usage and blockchain based banking software
  development for their processes and
  infrastructure to improve customer experience.

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Are you also wondering how blockchain in
financial services can be used to improve
customer experience and banking landscape? Let's
have a glimpse of some really exciting use cases
of blockchain technology in the banking and
finance sector.
Top 5 Whooping Use Cases Of Blockchain In Banking
And Finance 1. Peer To Peer Money Transfer
System
There are dissimilar P2P transfer systems
available across the world that allows customers
to transfer money through banks accounts or
credit cards. However, these solutions include a
number of limitations. Major limitations
addressed by experts in these systems are
limitation of geographical region, third party
authentication charges for offering transfer
services, and insecure in terms of sensitive
customer data.
Image source Using blockchain-enabled P2P
transfer systems, all of these problems can be
addressed and solved. As blockchain enables the
use of a decentralized ledger system to
peer-to-peer money transfers. Moreover,
blockchain eliminates the issue of the
geographical region it means both sender and
receiver shouldn't be available in the same
geographical region.
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Above all, blockchain money transfer happens in
real-time so the receiver can instantly access
the money once it is transferred. In short, no
wait time.
2. Digital Identity Check Banks could not
conduct financial transactions online without
verifying user identity. Thus, the banking
system includes a number of processes for
identity checks that always annoy users. These
processes can be recognized as face-to-face
verification, a form of authentication (login
through OPT or password), authorization and more.
All of these steps are required to be performed
due to security reasons. The integration of
blockchain technology in this process will
benefit consumers and businesses with rapid
verification processes. The major aspect behind
its success is that the blockchain will allow
reuse identity verification for other services in
a highly secure manner.
Image source Zero Knowledge Proof is the most
significant and admired innovation in terms of
this. ZKP is being tested by several financial
organizations and corporations across several
countries.
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Succinctly, blockchain in digital identity check
will empower users to choose the mode of
verification process they want to perform and
with whom they would like to share their
identity. There will be no need to enter user
identity again and again on the blockchain
system. Above all, you won't need to perform
registration separately for every single
provider, as all providers will be operated by
blockchain. In short, blockchain is highly
secured to store all of this information.
3. Blockchain-Enabled Trading Platforms When it
comes to trade finance sectors, blockchain
incorporates the potential to revolutionize this
space. Do you know that still, a number of
trading activities take place on paper such as
letters of credit, bills and invoices? Indeed,
systems for online order management are
available, but the process requires a lot of time
to accomplish. The blockchain-enabled trading
system will digitize these processes and reduce
the time consumed in a manual process,
bureaucracy and paperwork.
Image source Blockchain-based trade finance will
streamline the trading process by getting rid of
such time-consuming manual processes, paperwork,
and bureaucracy. As there will be no need to
maintain multiple copies of trading data with a
blockchain system, and information will be
available in secured digital documents.
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This document will enable real-time updating and
offer access to all users in the network.
Moreover, errors in documents can be traced in
the decentralized database, and all users will
be integrated through a consensus.
4. BlockChain -Driven Fundraising
In the financial market, fundraising is the most
complicated process. That always creates havoc
for organizations and venture capital. It majorly
indicates an extensive process including, deck
collaboration by entrepreneurs, take part in wide
length meetings with partners, hours-long
negotiation on equity and valuation, and at last
wish to exchange.
Image source Albeit, blockchain has reduced the
hassle in this space by accelerating processes by
infusing alternatives to fundraising. These
alternative solutions include ETO (Equity Token
Offerings), IEO (Initial Exchange Offerings), and
STO (Security Token Offerings). These include
major offerings of blockchain-based banking
software development services that
entrepreneurs, SMEs and global brands are
striving to leverage. Albeit a dual diligence
process needs to be passed by these processes to
raise funds
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Earlier, ICOs (Initial Coin Offerings) were more
prominent, though now scammy and unreliable.
5. Blockchain In Hedge Funds
The hedge fund is a unique type of investment
partnership that includes a group of investors
and a fund manager, which involves limited
partners. However, these people are usually
traders instead of ordinary investors. If I talk
about hedge funds, then you must know that
funding is mainly focused on increasing investor
returns and reducing the chances of loss. In a
recent couple of years, cryptocurrencies have
doubled the hedge fundraising. Actually, a
decentralized hedge fund based on crypto caters
an open platform for investors and fundraisers
to participate with more transparency. The
reason to adopt this model is the sovereignty of
fund managers over money the decentralized
system will enable fund managers to work within
the single entity.

• The Future Of Banking Finance
• Since blockchain has the potential to transform
  the banking and finance sector from its core, we
  will be experiencing drastic changes in
  finance-related processes in future. Here are
  some expected changes that you may see in future
  and relish
• Increased number of online money transfers
• Cryptocurrency may replace currencies fiat
• Enhances banking financial processes
• Faster real time payments across the world
• Arrival Of Independent banking

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These are some expected changes that we may
experience in future with the integration of
blockchain technology in banking and finance.
However, many chaos and challenges will also
arise concurrently.
Final Words There are more than 39,000,000
blockchain wallets that are facilitating digital
money transfer and saving. This number will rise
in upcoming years as financial institutions, and
small organizations are driven to leverage the
potential of blockchain technology. This
technology is thriving as the most significant
trend in the finance and banking sector, which
is expected to bring great ease to consumers and
financial institutions. So, won't you like to
use cryptocurrencies or a peer-to-peer system to
send money to your cousin sitting
abroad? Blockchain is a powerful tech concept
that will invigorate financial institutes and
banks. It is an exclusive technology solution to
adopt by organizations engaged in day to day
money transfer and purchasing. If you are
involved in business processes where you have to
deal with millions of money transfers, you must
embrace blockchain app development for your
customers' convenience. Original
Source https//customerthink.com/top-5-thought-pr
ovoking-use-cases-of-blockchain-in-banking-finance
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