How Blockchain Revolutionised Fintech
By FF Newsroom · 17 December 2019
When looking into the growing industry of Fintech there is no denying that the industry has grown substantially in recent years. With changes to traditional banking as well as the increased security that is added with this style of technology, there is no denying that blockchain technology is perhaps one of the biggest changes to be made since the internet. But how has it revolutionised fintech technology for the better? In this article, we will be looking into some of the ways that blockchain has completely changed the fintech industry as well as the impact that it could have on a wide range of other sectors.
Blockchain is a public record connected through a network. This is recorded in a blockchain form and refers to the transfer of money, ownership or a transaction to identify an agreement between two or more parties. All information in software such as this is stored in blocks of information connected within a wider network. Each block is stored with a unique code called a hash which sets it apart from other blocks within the system. Regardless of whether you make 1 transaction or 2 or 3 these will all be saved in individual boxes in order to differentiate which is which.
Though there has already been a big shift in the number of people using fintech technology such as this to trade in Bitcoin, there has also been a knock-on effect to a number of other sectors, especially traditional banking services.
One of the biggest impacts to traditional banking that fintech has had is the increased security, as blockchain technology uses an encryption method to provide a stable trading system as well as the reduced transactions costs both nationally and internationally. In addition to the reduced transaction cost, there are a number of other benefits which are as follows:
- Quicker Transactions
- Transparency
- Accessibility
Though these benefits were very appealing for the millennials looking for faster access to funds with more accessibility, it is the industry leaders that have been slightly more hesitant. With initial resistances from financial instructions, this form of blockchain model was not as popular with those outside of the use of cryptocurrency. However, this has begun to lessen in recent years as the popularity of this style of the platform begins to rise. This has seen a number of institutions such as universities and shops using this style of platform to monitor transactions as well as accept bitcoin making this more accessible than ever. This is slowly beginning to change the industry for the better-allowing transactions to be made much faster and with a lower transaction cost.
However, the implementation of blockchain within banks could eventually lead to the complete removal of traditional paperwork, clearinghouses and even help to settle contracts significantly faster than before.
Another revolutionary change that came from the implementation of blockchain technology is increased security. Though this is only a young form of technology at this point, the security it has bought to the Fintech industry is undeniable. But how long is this set to last for? With a number of industry experts claiming that hacks will be possible as the technology begins to age. Though this is only speculation at this time, international trade continues to benefit from this style of secure trading, allowing for businesses and individuals alike to make the most out of blockchain technology and cryptocurrency as a whole.
In addition to the implementation of international trade, Blockchain technology has also revolutionised the use of fintech technology within the business sector. Whether this is the use of a blockchain system for a secure transaction overseas, or smaller businesses relying on top forex brokers to aid them with their efforts in international stock trade there are a number of ways that these quick payments and greater accessibility has continued to better a wide range of industries in the last to years.
Though the implementation of blockchain technology is mostly within banking and fintech at this time, there is a reason to suggest that this style of platform can be used in the medical sector as well as in much larger corporations. This could benefit the NHS, as well as a number of cars, manufactures as it allows each record to be saved within the system with its own unique number. This allows all information to be found quickly with one simple search.
With this in mind, the implementation of blockchain technology can benefit a number of industries regardless of the size of the business as it allows you to record all your transactions in one place. This is far more secure than a flat-file database and can help to keep payment information and other key data safe and secure. But how will this be implemented further in 2020, only time will tell.