Disrupting the Financial System with Blockchain

While Bitcoin is not replacing currencies in the world anytime soon, you should know that the digital currency is relevant to your business. Its underlying technology – blockchain – could challenge our assumptions about the security and reliability of commerce. In fact, many leading financial personalities believe it could transform the business world in the next decades. If you do not want to end up like other companies, which failed to recognize the importance of the Internet, you might want to reconsider.

The financial industry has started to explore the blockchain’s potential. The investments company, BNY Mellon, is testing the technology internally to determine if it can be used to motivate employees. UBS is also attempting to build a secure, reliable, scalable and efficient blockchain solution. The company believes that the technology can improve the client experience ultimately.

The blockchain makes cryptocurrency legit for financial services, making it wise for the investment community to look over the developments in the cryptocurrency space. In the past twenty years, banks have reduced settlement of bonds, stocks and assets. Since communications and vetting can occur in two to five days, the time lag can increase financial risks. Through the Bitcoin technology, they can complete transactions in record time.

By using blockchain as a ledger, financial service entities can track and use smart contracts to verify business agreements and relationships while circumventing the legal system. Tying smart documents to a blockchain would provide the functionality of Rosettanet and other electronic data interchange (EDI) platforms at a much lower cost. Since the underlying technology is effectively free, related technologies could be used to manage and authenticate transactions.

You may think that Bitcoin is a risky investment, but the blockchain makes it worth trying for. The revolutionary technology can actually disrupt the financial sector. Since the financial industry is built on ledgers, it is a challenge for the industry to guarantee and track assets from one ledger to another. As a digital ledger, blockchain will impact the way the industry conducts business. Distributed across millions of computers, it records all transactions with little or no cost.

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5 Finance Leaders who Embrace the Blockchain Technology

The blockchain is enjoying popularity among the largest banks in the world. Some have gone public on their interest of embracing the technology, while others have chosen to keep it amongst themselves. The bottom line is everyone is talking about it. In fact, nine major banks have already partnered with R3CEV, a distributed ledge startup. Thirteen more have joined to bring the revolutionary technology to Wall Street.

The banks are investing money in the startup to study the blockchain tech. They are committed to collaboratively apply and evaluate the technology to the global financial system. Industry standards need to be secure, scalable and adoptable, and the blockchain is the solution to transform financial technology platforms. Many finance leaders recognize this fact and that is why they are welcoming the technology with open arms.

  • Speaking to CoinDesk, Alex Batlin of UBS considers blockchain as one of the biggest unions of business and technology today. He thinks that the partnership between startups and bigger companies can work well as they complement each other. Earlier this year, the Swiss investment bank surprised many people when it announced its plans to open a blockchain research lab, which will be based in Canary Wharf district, London.
  • Head of Citi Ventures innovation network, Debra Brackeen also announced that the company is testing the blockchain technology. She believes that there is reason for banks and other financial institutions to be looking at the revolutionary technology.
  • Mariano Belinky, managing director of Santander InnoVentures, also spoke to CoinDesk about the cryptocurrency technology. He believes that the blockchain will be adopted sooner than expected – perhaps, even faster than the adoption of digital currency.
  • Former senior executive of JP Morgan, Blythe Masters, also spoke about the potential of the blockchain technology in various occasions. She believes that the technology can solve many of the issues plaguing the financial industry today. While the distributed ledger technology can disrupt certain business models, it can also empower existing ones by lowering costs, reducing risks, and increasing efficiency.
  • The chief economist of the Bank of England, Andrew Haldane, described blockchain as having real potential.

The collaboration between banks and R3CEV will work on the development of standards for using the blockchain technology within the financial industry. They will develop prototypes and proofs-of-concept as well. If these finance leaders recognize the potential of the technology, you should too. Blockchain will lead digital transparency and trust revolution. It will be the new digital foundation for business.

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