Blockchain is certainly one of the most sought-after technologies that we have today. It has immense potential to revolutionize every aspect of our day-to-day lives. It makes applications decentralized, which offers a high level of security, transparency, and flexibility in diverse business networks. In this blog, we will take a look at how blockchain financial solutions revolutionize its space globally. For instance, how blockchain insurance solutions provide a means to prevent frauds and address inefficiencies.

Blockchain creates an immutable record of data that is shared among a distributed network and is secured with the most advanced form of cryptography. Blockchain is also highly flexible and has found its primary use cases in the financial services space for handling various operations, especially data entry and analytics tasks.

Although blockchain technology has made its effect felt all across the globe, the two industries where it has gained maximum heat are banking and finance. Trillions of dollars are moved across the global financial system each day, serving billions of individuals, businesses, and groups of individuals. But all these day-to-day transactions are still heavily dependent on manual processing and involve a lot of paperwork. This not only causes uneven delays but also makes the process way more complicated and difficult to manage.

Or worse, it can get on your nerves as it may cause whopping losses if not managed properly. In this scenario, Blockchain can be the remedy we are looking for. Blockchain has done a bang-up job by making the entire process as swift and secure as it could ever be! This state-of-the-art technology has not only digitized the entire process but it has also rendered a decentralized Peer-to-Peer system that is not controlled by any third party or intermediary. So the major businesses and companies can make big transactions with minimal transaction fees and without any central system like banks governing the transactional data.

Blockchain has got all it takes to revitalize the banking and financial industry space using a wide range of applications and use cases. Down below are listed some of the startling applications and use cases of the blockchain technology that can bring a drastic change in the picture.

Blockchain Applications and Use Cases in the Financial Services Industry

Know Your Customer (KYC)

Not long ago, KYC was done by verifying the hard proof of documents by meeting the customers in person. Although those days are long gone, the worldwide financial institutions spend a fortune on keeping up with the KYC compliance. A rough estimation is that somewhat around $80 to 500 million dollars are spent every year in KYC verifications and customer due diligence regulations. Following these regulations is crucial for protecting against terrorism and money laundering activities. In this field, Blockchain technology can be a major uplifter as it allows independent verification of one client by one organization to be accessed by other groups. Because of that, you don’t have to start the KYC process over and over again. Apart from that, it also reduces the administrative costs up to great extent.

Fraud Detection and Prevention

Blockchain offers top-tier protection to the user data by using the most advanced form of cryptography. It stores data in a series of blocks that are electronically linked thereby forming a massive database. Encryption is done to protect sensitive user data, making it immune to all kinds of cyber-attacks and online thefts. Each block in the ledger contains a timestamp and stores a small patch of transactions with a link to the previous block.

The blockchain is a distributed ledger which means the cybercriminals would have to hack the entire database rather than hacking a central hub which gives them access to the entire system. This makes blockchain the most advanced storage medium ever to exist and protects against all kinds of cyberattacks.

Smart Contracts

Smart Contracts are the self-executing wills that automatically enforce negotiation between two or more parties based on certain contractual clauses. These contracts facilitate fair agreements on certain terms and parameters. A smart contract solution also saves you from the unnecessary paperwork by creating a permanent record on the blockchain which can neither be deleted nor be altered or modified. These contracts are automatically executed when exposed to a certain trigger event.