The blockchain is revolutionising the way many industries run.
With big players and even governments injecting substantial capital into the blockchain, it gives developers opportunities to phase their focus in developing technology for the BFSI sector.
The BFSI (Banking, Financial Services and Insurance) sector is starting to rely on the public blockchain, private blockchain and the consortium blockchain to simplify its functional environment.
To growth is expected to be exponential as the sector is growing at CAGR 62.78% for 2018-2022 as per market research expert Technavio.
With countries like China, Russia and China expected to join the bandwagon, blockchains perception as an insecure platform for financial applications is expected to disappear.
Factors Driving Growth in BFSI
The primary factor behind such growth is mainly to the acceptance of blockchain technology by significant names in the industry. Government investments in blockchain have also added to this growth.
Governments are increasingly partnering up with blockchain ecosystems to release their version of e-currencies. This shift to e-currency was flagged off in 2016 when Tunisia and Senegal released national currencies based on the blockchain.
Another factor driving growth is the use of IoT integrations along with blockchain ensuring seamless data flow across connected networks. In fact, the IoT blockchain combo has much more to offer; it is expected that the two combined will be able to provide real-time asset management and transactions.
Practical Applications of blockchain in BFSI
While the uses are many, here are some which blockchain based platforms can count on from Day 1
Each year, the financial world is hit by economic fraud. The underlying reason would be the use of a centralised database in which hackers can quickly get into. Fraud of this kind can be eliminated with the use of Blockchain.
Over the year, Financial institutions spend millions of Dollars to collect customer information. A functional blockchain integration ensures that a single organisation’s data can be transferred across the blockchain to be used by many organisations, drastically reducing administrative costs across the industry.
The use of blockchain in BFSI sector would enable the elimination of intermediaries and along with it a significant reduction in transaction costs.
Other benefits would include faster transactions, increased security and streamlined, international payments.
Blockchain integrations will enable the use of banks analysing repayment capability of individuals based on a global credit score. Institutions can provide loans to a wide range of consumers after looking though secure decentralised registries to find previous payment history.
The Rise of Crypto Banks
With so much happening in BFSI with blockchain, it comes with no surprise that many crypto banks have emerged looking to lessen the gap between it and traditional banking. Crypto V8, the crypto bank that bridges the gap between retail banking and crypto currencies and eliminates the guesswork for users and banks, is all set to make stamp its hallmark in the world of Banking and Finance in the UK.
Crypto banks aim to increase the adoption of digital currency. They promise an improved user experience to users of cryptocurrency.
Crypto banks are currently focusing on improving the real world usability of cryptocurrency by using coins which are less volatile and giving merchants access to faster payment gateways.
All these innovations would give rise to peer to peer banking environments which may/may not be under be the control of any central banks.
Capitalizing on Untapped segments for Growth
While taking on the mainstream financial sector is suicide, especially in its growth stage. Crypto banks are trying to focus their actions on economies with limited access to financial services.
There are many reasons why this segment could adopt crypto banks.
- With most of them having internet access Opening a crypto bank account is as easy as downloading an application
- With revolutionary peer to peer integrations, consumers would be able to transact in the coin of their choice efficiently
While opportunities for growth are many, we can expect a reasonably swift transition into the blockchain realm by the BFSI sector. As these integrations take place, central institutions would also transition into blockchain looking to sue the infrastructure to develop their digital currencies. All of this will increase the acceptance of crypto banks.
The end consumer is the winner here as he will be able to reap full rewards of using peer to peer networks, secure networks and global transaction capabilities.
Name : Jacob Christiansen
Email : [email protected]
Website : https://www.cryptov8.com/
TG Group : https://t.me/cryptov8
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