How Is Blockchain Technology Disrupting The Financial Services Industry?

Since the concept was introduced more than a decade ago, blockchain technology has evolved rapidly over the years. From retail and banking to healthcare and defense, the technology is gradually making its way into a range of industry verticals and is anticipated to transform the way data and processes are shared and handled.

An increasing number of businesses and organizations are exploring ways to incorporate the technology to conduct business and transactions in an efficient and reliable manner and eliminate the risk of frauds. The technology is poised to witness surging adoption among startups in the near future. Global Market Insights, Inc., estimates that global blockchain technology market size will be worth over $25 Bn by 2025.

Prominent Applications In BFSI

Several banks and financial service providers are experimenting with blockchain for applications such as money transfers and record-keeping, among other back-end functions. Blockchain applications transform paper-intensive international trade finance processes into an electronic decentralized ledger that provides all concerned entities the ability to securely access a single source of information.

Financial institutions worldwide are witnessing a rising number of scams. Fraudsters are bypassing bank controls and manipulating customers into making payments to them. In fact, according to the Global Banking Fraud Survey by KPMG, more than 50% of survey respondents around the world reported a rise in both total external fraud value and volume.

Blockchain plays a critical role in fraud reduction. The technology facilitates the use of smart contracts to support the storage of any type of digital information. Moreover, implementation of blockchain in digital payments could prove to be highly transformative in the payments space.

Benefits In Transportation & Logistics

In the past few years, blockchain technology has experienced increased adoption from the transportation & logistics sector and is anticipated to help tackle some of the major inefficiencies that have been persistent in the industry for decades. For logistics companies, blockchain promises to bring transparency to all documents and transactions, increasing efficiency and innovation of supply chains.

Statistically, there are around $140 billion tied up in disputes for payments within the transportation & logistics sector every day. Blockchain-enabled platforms facilitate easy coordination of documents and eliminate the need for physical paperwork. With the use of smart contracts, customs clearance and approvals can be faster and more efficient in the future, minimizing processing time for goods at customs checkpoints.

Walmart Canada, the Canadian division of American retail giant Walmart, recently launched the world’s largest blockchain-based freight-and-payment network. The new blockchain-based supply chain apparently includes freight tracking and payment processing capabilities for about 70 logistics companies who supply goods to over 400 retail outlets.

Future Trends To Be Driven By Emerging Players

While tech giants such as Amazon, Google and Microsoft explore ways to develop blockchain-as-a-service (BaaS), blockchain startups are focusing their attention on optimizing existing blockchain capabilities. For instance, Storj Labs, a blockchain-based storage service based in Atlanta, Georgia, recently unveiled the Beta 2 release and pricing of its Tardigrade Decentralized Cloud Storage Service which was launched earlier this year in August.

Storj claims that the Tardigrade storage service provides a resilient and cost-effective approach to users and ensures up to 99.97% availability. The company said that its prices are less than half the starting prices of prominent cloud storage providers such as the Amazon AWS S3.

Similar efforts from emerging players are anticipated to disrupt the blockchain industry in the forthcoming years. Future blockchain trends will be driven by rising penetration in sectors such as military and defense and healthcare.

Recently, the Chinese military announced plans to implement blockchain for a token reward system for soldiers to encourage them to enhance their performance.

The technology has immense potential to transform the healthcare industry by putting patients at the centre of the healthcare ecosystem and enhancing the interoperability of health data while ensuring security and privacy.

[This article is shared by Global Market Insights Inc team.]

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