The fact that blockchain provides a high-security level is undisguised, and comes in a “decentralized public ledger” has the momentous potential to shake the payments solution space.
With much of the financial service arena battling with the overwhelming challenges of fraud and maintaining the integrity of data, blockchain is sure to deliver by tackling these issues head-on.
With much hype and interest that blockchain and cryptocurrency have produced, many in business and the financial services industry as a whole are still unsure about its significance.
According to a FinTech survey conducted by PwC Global back in 2016, 56% of the respondents agreed and recognized that blockchain technology was important. However, 57% said they were “unsure” or “unlikely” to respond to this growing trend.
Based on the trends, it is believed that using a “blockchain public ledger” will become a critical part of a financial institution’s technology and operations infrastructure.
By using blockchain systems, financial institutions can save more money than using any existing platforms, simply because they eliminate the overhead that is devoted to confirming authenticity. Within a “distributed ledger system”, the confirmation of authenticity is carried out by everyone within the network, concurrently. This eliminates the need for any “intermediaries” to meddle with the process, or causing an interruption.
Numerous transactions can be carried out using this technology, including transferring digital or physical assets, securing intellectual property, and authenticating the “chain of custody.” With the instances of cybercrime multiplying at breakneck speed, having a robust system that is highly resistant to fraud to protect and authenticating transactions will be a valuable and indispensable tool within the financial services industry.
Tackling The “Trust Issue”
The greatest challenge being faced by both institutions and the industry is trusting blockchain technology. In order for these institutions to fully adopt this new technology, many issues need to be addressed.
First, there needs to be a clear understanding as to whether the public ledger can be hacked. Another concern is the negative reputation of Bitcoin. Finally, once the blockchain is adopted permanently within a business or industry, what are the potential regulatory constraints they must be ready to face?
The key is to learn, plan, and test. It’s critical to sort through the clatter, separating the hype from the truth. It is also important to have a clear plan as to where to implement this technology. Once that is settled and decided, then a practical execution plan can be easier to carry out to determine where a blockchain can be built within your infrastructure.
The Future Of Blockchain
Although the potential benefits of using blockchain are well-founded, the industry as a whole is still ambivalent about implementing it within their institutions. There are still doubts as to how this technology should be best used. If some companies already bring trust and transparency within their daily operations and dealing with their customers, what use do they have from a “transparent” blockchain?
What doesn’t help its cause is the fact that blockchain is still in its early stages. However, blockchain’s potentiality may be enhanced as it becomes more “user-friendly” for developers. Another decision-making factor can be showing its utility and its potency. Where blockchain can really showcase its capacity will be in the payments sector.