The Technology Headlines

Role of Blockchain in the Banking Industry

Role of Blockchain in the Banking Industry

Role of Blockchain in the Banking Industry

Banking sector has been evolving since the 18th century and has progressed and grown with every passing year. In the past, banks were always considered as a place with long queues and an unmanageable amount of paperwork. Now with the help of technology in the banking sector, everything has been drastically changed and the need for labor and papers has reduced a lot. This article discusses a few roles and functions of blockchain banking that are set to fundamentally transform the entire banking services.

  • Processing payments more quickly

Banks are more interested in blockchain. Blockchain technology is set to change the entire face of the banking or financial services industry. If this technology is fully adopted, it will enable banks to process payments more quickly and more accurately while reducing transaction processing costs and the requirement for exceptions. 

A recent survey found the fact that blockchain use is top of mind among banking professionals who lead payment businesses. The interest in blockchain among banking professionals is quite high because professionals, in general, expect a wide range of benefits, including lower costs, quicker settlements, fewer errors and exceptions, and new revenue opportunities.

  • Chatbots

Chatbots are a great boon in the revolution of the banking industry. The combination of blockchain and chatbots can revolutionize many sectors including the banking sector. Chatbots are nothing else but automated chat programs that use artificial intelligence to provide effective customer service. Owing to technological advancements, chatbots have taken over the role of humans in assisting people in their tech-related interactions. Without the assistance of human being, customers are now able to get their complete transaction details online by using chatbots. Through chatbots, banks can understand the plight of customers and offer additional services to customers. However, making payments through chatbots on social networks may not be too secure. That is why the chatbots need blockchain.

  • Peer to Peer transfer

With Peer to Peer (P2P) transfer, customers can transfer funds from their bank account to another person’s account through the Internet. Although there are many P2P transfer applications, yet all of them have certain limitations like the inability to transfer money if both parties are located in the same country. In addition, certain P2P services charge huge commissions for their services and are not secure enough to store sensitive data. Like these, there are many issues—nothing to worry, all of these issues can be solved with blockchain-based decentralized apps for P2P transfers.

In a nutshell, blockchain has no geographical limitations. It exists everywhere, enabling to do P2P transfers worldwide.

In Conclusion

Blockchains have a bright future. Blockchains can help banks not only to reduce the cost of processing payments but also to create new products and services that can generate important new revenue streams. The biggest key to turning the potential of blockchain into reality is a collaborative effort among banks to establish the network needed to support global payments. Banks need to look at the bigger picture and work together—and with non-banks—to help define the framework that can underpin a universally accepted, ubiquitous global payment system that can transform the way banks execute transactions.