5 Advantages of Blockchain Technology Financial Institutions |→ Future of Banking and Finance

When it comes to banking and finance, disruption is on the horizon. The popularity of Blockchain technology is leading the way for decentralized currency.

While this technology is relatively new, it is likely to have a huge impact on the banking and finance industry. The rising cost of bitcoin has made industry executives take notice of Blockchain technology.

Understanding Blockchain Technology

As this technology is not used by many people, it can be difficult to understand. Most people are used to dealing with money they can see and touch. Here are some things you should know about this technology.

Blockchain technology allows information to be distributed globally without being copied. This technology was created to be used as a digital currency. As technology has advanced, users have determined that the possibilities of this technology are endless.

Simply put, Blockchain technology is a digital ledger of financial transactions. Can be used to record all items of value. Your information is stored in a shared database that can be viewed by other users.

To understand Blockchain technology, let's think about Google docs for a moment. When you send a Google doc to someone else, you don't have to wait until they're done with the docs to see the changes. It's a shared document that gives you the power to be an active participant throughout the process. Blockchain technology offers a similar type of technology.

Why is Blockchain technology important for financial institutions?

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Since the Great Recession of 2008, banks have been feverishly looking for new technologies that will allow them to regain the trust of their customers. Blockchain technology seems to have the key elements to be a solution to the banking sector problem. Here's why.

1. Blockchain technology is secure. Before a transaction is finalized, all parties must verify and approve each transaction. As the computer network is not connected to other networks, it cannot be hacked. Blockchain technology cannot be corrupted because it is decentralized.

2. The financial industry is changing. The banking and finance industry is a heavily regulated industry. For this reason, the industry has evolved at a slow pace. Blockchain technology does not have the same financial hurdles. As the global financial industry begins to adopt Blockchain technology, worldwide regulations will become less stringent. Banks will be able to participate in this new technology without fear of being fined by regulators.

3. Blockchain technology is cheaper to implement than current banking procedures. When banks implement this technology, they enjoy significant savings. Consumers can only wait for the banking system to pass the savings on to them.

4. Blockchain technology is not limited to bitcoin and cryptocurrency.  There are so many ways the financial industry can use Blockchain technology. Here are 5 ways to use it in the financial industry.

• Increase the speed of cross-border financial payments.

• Trade stocks with greater precision and speed.

• Execute contracts without having to pay someone to manage the process.

• Improves online identity management.

• Offers greater traceability and transparency for financial transactions.

While Blockchain technology is poised to disrupt banking and finance, radical changes can take years. Keep an eye on Blockchain technology and the financial sector for future developments.

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