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Since its inception, Blockchain has been said to bring in a revolution on part with the birth of the internet. What started as a decentralizing currency and assets, is now disrupting every mainstream industry including healthcare, pharmaceuticals, insurance, and digital security. But one area where blockchain technology can completely revolutionize is the fintech industry. As we all know, Blockchain is a public ledger of information collected through a network that sits on top of the internet. The information recorded on blockchain can be anything. It is stored in the form of blocks and each block is connected like a chain. This technology is being continuously experimented in the fintech industry to bring out new use cases and applications to solve redundant and complex issues. Here are a few applications of blockchain in the fintech industry.
Supply chain financing and management
This is one of the important applications of blockchain in fintech. Blockchain technology can help the fintech industry with several aspects of supply chain management. This allows higher settlement turnaround time at lower cost by providing a single source of truth regarding key areas in the supply chain including creditworthiness, supplier inventory levels, purchase order receipt and approval, and more. It also helps the fintech industry in keeping financial operations risk in check.
Secure payment solutions
Blockchain technology promises to bring in fast, reliable, secure, and low-cost international payment processing services. This is done with the help of encrypted distributed ledgers that provide trusted real-time verification of transactions. One major benefit here is that this eliminates the need for intermediaries such as correspondent banks and clearinghouses. Thus, with blockchain fintech apps, the process of sending money regardless of how much is significantly faster and it further ensures a smooth, transparent, and error-free transaction.
Fraud detection
Blockchain could give the fintech industry the fraud prevention capabilities that it has been looking for for a long time. The need for collaterals, the exchange between multiple parties, currency differences, and many other things complicate financial transactions. But with blockchain, information can be shared in real-time thus reducing the fraud propensity. Smart contracts that can be enabled with blockchain also helps in reducing financial fraud in a big way. A smart contract is a computer code running on top of a blockchain containing a set of rules under which the parties agree to interact with each other. This facilitates, verifies, and enforces the negotiation or performance of an agreement or transaction.
Record storage and management
One inevitable thing in the finance sector is the myriad of documents and paperwork. Many existing products and services that provide secure and verified document management tend to be expensive and often require the involvement of a third party. Documents in physical or digital form can be modified and copied. But with blockchain technology, you can embed the authentication into the document itself and with the help of a closed-loop tracking system, you can protect the document against tampering or modification.
Regulatory compliance and audit
Carrying out efficient and fool-proof auditing, accounting, and record-keeping, has been a difficult task for the financial services industry for many years now. Blockchain technology can totally eliminate the error-prone and time-consuming traditional way of record-keeping and book-keeping. It provides new, disruptive methods using distributed ledgers secured by cryptography that can make audit and financial reporting transparent and error-free. Blockchain technology, with its immutable nature, can remove risks, uncertainty, and complexity associated with regulation because once data is saved into the blockchain, no one can modify or delete it.
There is no doubt that the fintech industry’s growth is with blockchain. At Intone, we provide innovative expertise and capabilities needed to deliver the future of fintech today. Whether we’re helping to transform and modernize core banking operations, enable a mobile banking experience to become a social one, create world-class payment and credit processes, or provide data monitoring, analytics, and quality assessment and compliance and assurance reporting, our services empower our clients with data-driven insights and the right tools to excel in today’s digital landscape. Explore the future of fintech and banking with us and understand today’s reality and how world-class financial institutions win in an ever-changing landscape.