Banks and Blockchain Technology
The term ‘Blockchain Technology’ attracted a lot of interest after the success of Bitcoin.In simple terms, Bitcoin is a digital currency which uses blockchain’s distributed ledger to transfer value this is just like a regular bank.
But unlike banks, it does not have a middleman because it is decentralized.
Blockchain allows peer-to-peer transfer which means that you can send money directly to anyone around the world instantaneously.
Blockchain has been around since the late nineties.
Satoshi Nakamoto was the first to use the blockchain technology with Bitcoin in 2009.
The current problem with bank and wire transfers.
Depending on where you live, a typical bank transfer of $100 can cost up to $30 and take 5-10 business days.
Though Western Union and Moneygram have made forex transfer faster, they are extremely expensive in some countries.
It is also impossible to send cash instantaneously to an employee or loved one who uses another bank in another country.
Paypal and Skrill introduced the idea of peer-to-peer, however, they do not support all countries.
And unfortunately for users, Paypal has increased its transaction fees in April 2018.
Why are banks so interested?
Cutting out the middlemen will not only save time but will help both the customers and the bank save a lot of money in transaction fees.
Now, let that sink in…
Using Blockchain Teachnology for Business Identity and Compliance
Banks have to adhere to strict regulations and anti-money laundering guidelines.
This is also known as KYC (Know Your Customer).
Therefore the ability for businesses to prove their identity more efficiently and accurately, is extremely attractive to banks.
This will make safer and easier for businesses to access customers’ accounts for payment gateways.
Secondly, blockchain will also give customers control over their private data and information.
This will in turn make identity verification easier because all the information will be from one source.
The experience can be compared to posting a letter at the post office and sending an email.
What’s the future of block technology in banking?
Despite blockchain technology having been around since 1991, blockchain is still considered at its early stages.
The good news is that in 2017, Accenture did a survey involving 32 banking professionals and they found out that 9 out of 10 banks were exploring block chain.
So to conclude, let’s remember that Internet started development in the 1960.
Whereas the world wide web was invented in the 1980s.
And just like the internet, blockchain technology stills needs to grow and evolve a lot more before gaining mass adoption.