Blockchain is revolutionizing the Fintech industry, making it more transparent and cost-effective.
In the financial services industry, Fintech is a much talked about term these days. Fintech is a game-changing, disruptive innovation with a potential to shake up traditional financial markets; be it mobile payments, money transfers, loans, fundraising or asset management. Another hot term in the financial world is Blockchain. Blockchain is an extremely important part of financial innovations, and one of the major driving forces behind the Fintech revolution.
A blockchain is a type of decentralized and distributed ledger for maintaining a permanent and immutable record of transactional data in a chronological order. The transactional data is stored in a continuously growing list of records, called as blocks. Cryptography links and secures these blocks together. Each block has a hash pointer (a link to the previous blog), a timestamp and transactional data.
Today, the Fintech space is a very fluid environment, growing at a rate of 23% year on year. But the biggest challenge the industry faces, is trust. How could Fintech solutions earn people’s trust? How could a safe and secure financial product be made and widely used? Unlike large banking institutions, a lot of Fintech institutions lack the financial resources that they need to develop or even procure a system that would be highly secure. Compared to this, Blockchain is much cheaper to develop and its security features are notable. It enables institutions to track the complete lifecycle of a financial transaction. It can ensure that all processes involved are more democratic secure, transparent and efficient. But the main power of Blockchain lies in two of its chief attributes – decentralization and distribution.
Blockchain secures the data, cuts out the middleman and as a result, there is no single authority. The power thus goes in the hands of the one who owns the assets.
Blockchain has a distributed infrastructure that could share information that is secure and the data transfers that take place through blockchain are unalterable, ensuring data integrity. This is an important mechanism on the basis of which the trust of businesses and customers can be earned.
Some of the major use cases of blockchain technologies in financial services are –
No matter how thrilling the scope of blockchain is in the world of Fintech, it is estimated that it will be quite a few years before the technology becomes a mainstream function. There are still challenges that need to be ironed out before blockchain can realize its full potential and become widely accepted. Research and development in this field needs to happen in full swing. Organizations need to train their workforce in blockchain technologies to be ready to be a part of revolution.
Cognixia is an e-learning and digital transformation preceptor with a wide-range of courses on blockchain technology for students, individuals, and corporate workforce. Cognixia strives to offer the best training deliverables with the perfect blend of theory and hands-on training instilling best practices. With industry experts as instructors and state-of-the-art infrastructure, we try our level best to make the whole learning process successful.