Key Advantages of Using Blockchain in Banking

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Key Advantages of Using Blockchain in Banking

Jul 15 in Blockchain by blockchainhq
• 120 points

edited Jul 15 by Gitika 51 views

2 answers to this question.

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Hello @ blockchainhq,

 The key advantages of using Blockchain in banking are:

1. Fast-paced financial transactions:

This offers the opportunity for a widespread real-time payment solution. With this, transactions via blockchain will only take few seconds to complete between the parties involved. Hence, this eliminates third-party payment gateways and results in fast-paced financial transactions.

2. Lower cost of financial transactions

The long time required to complete financial transaction results in high monetary cost. Fast-paced transaction and eliminating payment gateways will result in low financial transaction cost.

3. Reduction of fraud

Banking systems are designed to function via a centralized database. Hence, they are vulnerable to serious cyber attacks due to its many points of failure. The truth is; all a hacker needs to gain access to the system to breach it. Once this happens, fraud is eminent if such breach is not noticed on time.

4. Establish smart contract

Blockchain technology has the ability to store enormous digital information. Thus, it establishes a smart contract in a given transaction once parties involved insert their unique keys. Hence, banks and blockchain companies can collaborate to create contracts for any completed transaction. 

5. Helps financial institution to Know your customer (KYC)

 Blockchain technology offers transparency and verifiable financial transaction with ease. With blockchain in the financial industry, individuals and banks can access their transactions. No one can delete or tamper with transactions done via blockchain technology. The truth is; financial institutions and individuals can have every transaction history with ease

6. Helps eliminate fraud in trading platforms:

Top blockchain development companies have developed unique technology that can disrupt these occurrences. blockchain technology can drastically reduce operational errors and fraud on these platforms.

Hope this is helpful!!

Thank You!!

answered Jul 15 by Niroj
• 44,800 points
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Hi, @blockchainhq,

There are a few more advantages listed below:

Enhanced Security: Once data is recorded in a block, it cannot be altered retroactively—this makes blockchain inherently secure. Exchange of transactional value in blockchain involves the use of unique digital signatures that rely on the public as well as private decryption codes; it is therefore governed by strict cryptographic rules. This reduces the risk of fraud.​

Increased Efficiency: Blockchain eliminates the risk of errors and duplication, and is consequently ideal for refurbishing a range of digital processes. It also allows transactional processes—from payment to settlement—to be fully automated, and removes any delays in documentation caused by duplication.

answered Jul 15 by Gitika
• 33,770 points

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