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Centuries old, the finance industry has probably seen the most number of major shifts in strategy and positioning among all. This industry which monitors money and credits of the market has found its edge over centuries of transformation. With its new customised variety of products and services, the industry has moved more towards customer centricity. The big financial institutions in play are now more focussed on what customers need and require. They manage money for individuals and invest for them on other people or institutions. It comprises commercial and investment banks, insurance companies, hedge funds, credit-card companies, consumer finance firms, accounting agencies, and brokerage firms.
The first digitization of Financing products happened when William Porter developed “Trade Plus”, an electronic trading platform which is now known as the “E Trade”, a subsidiary of Morgan Stanley. After the introduction of Trade Plus, the finance industry has come a long way. They facilitate setting and operating of big and small companies by handling the financial strength of these firms because of which it has become one of the top grossing industries. The industry has also seen some dark periods, one of the latest one is the Black Monday (19 October, 1987) which happened when NYSE faced its biggest one day loss in history which is nearly 26% of its value as per Carrerizma.
Blockchain technology is bringing wonders to the data protection industry in recent years and is getting adopted by almost every data concentrated industry to play its part in data protection. The technology distributes its storage and data over a wide network chain and gives access to various owners which makes it hard to tamper. From Bitcoin to personal data, blockchain is spreading its wings either by public blockchains with public key or private blockchains for private institutions. It is considered as one of the most secure data protection technologies of all time. The industry is expected to reach $20 Billion by 2024 in industries such as healthcare, BFSI, sports & more as per Towards Data Science. It is making the firms more independent and helps in maintaining their competitive edge over the market. It offers encryption & validation, secures data storage and is unfeasible to attack.
The finance industry like any other industry is investing a hefty sum of money on R&D to get in front of the line of the technological revolution. Security breaches is one of them where these institutions are trying more to concentrate to make their data safe. This industry has always been the first mover to adopt any latest technology which can help with their operations. That where the blockchain technology comes in between which distributes the ledger accordingly to make it impenetrable. The technology has its own benefits over the industry such as faster transactions, minimized credit risk, eliminating collateral costs and enhanced transparency. It also decentralizes the data which spreads its ownership over the network and makes these owners aware once any data tempered. Each block of this data chain is protected by cryptography which are represented by their public address.
One of the real life examples with the application of blockchain technology is with the banking industry. Loan recoverability is one issue that is at the forefront for these institutions and blockchain here can make it trackable for them. Every transaction can be stored in the blocks from start to end with which banks can easily trace the diversion in the loaned funds. Another example is with the payments. Domestic payments have developed in recent years but international payments still take days to figure out and to make every movement recorded is a whole new job. That’s where blockchain comes in place and eliminates the hectic job by reducing the time and cost and makes it more efficient.
With a wide variety of use of blockchain technology, every industry whether its healthcare or entertainment industry are opting for this. For securing data sources, this technology is challenging the traditional approaches on every level. As it’s time to move forward with the digital revolution, this technology can help in maintaining the relationship between the technology and user data & privacy. It can help in tackling data management and can give more concentration on privacy. It reduces delays & conflicts in transaction and can provide the actual data in real time. About 77% of the Fintech firms are expected to adopt the blockchain technology as per Financial Express shows the future scalability of this technology. Blockchain can work as a bridge for traditional institutions with technological gaps they have from a new business model and can bring them all on one platform.