Blockchain technology is gradually but assuredly making its way to the banking and financial services industry and is capable of changing the overall security of the banking sector. From remittances to securities trading to cross-border payments, blockchain technology is designed to impact how global transactions are implemented, and digital assets are kept secure.
Blockchain technology will change the future of the banking system in many ways. For instance, growing security, reducing fraud, human error, and charges for banks and clients, accelerating international transfers, potentially eradicating brokers and commissions, simplifying lending for lenders and borrowers, and through various use cases.
Deepak Thapliyal is the CEO of Chain, a blockchain-based technology company to enable a smarter and more linked economy. They form cryptographic ledgers and cloud infrastructure that strengthen transformative financial products and Web3 services. Founded in 2014, Chain has raised above $40 million in financing from Khosla Ventures, Pantera Capital, Capital One, Citigroup, Fiserv, Nasdaq, Orange, and Visa. In 2018, Chain was acquired by Stellar to form Interstellar, a commercial arm of the Stellar Foundation. However, in 2020, Chain was re-acquired to continue its mission to form a more healthy global financial system through blockchain and cloud technology.
According to Deepak, banks are the biggest beneficiaries of Chain’s blockchain product. Chain earlier worked with banks to launch a private settlement network between Citibank and Nasdaq for instant settlement on a pilot program. “We helped construct an on-demand settlement pilot for Citibank and Nasdaq as well as Visa to show how effective blockchain could be for their business. All banks should add blockchain to their programs and deprecate their old systems,” Deepak says.
Blockchain technology can make international transfers and monetary transactions faster, more cost-effective, transparent, and more secure. Currently, transactions can take multiple days and involve various third parties transferring money from one country to another. These parties each take their cut from the transaction. By the time the money reaches its destination, the sender may have lost a substantial amount. For international businesses and consumers, blockchain technology facilitates faster and simpler peer-to-peer transactions more effective for international businesses and consumers, i.e., through a Bitcoin wallet.
Blockchain helps reduce fraud as it generates a clear audit trail. It also has several redundancies, so modifying any information once uploaded on this network is almost impossible. Many computers preserve the Blockchain network, eliminating a principal point where hackers could attack the network and change data without leaving evidence behind. This aspect of blockchain makes it extremely relevant in the current global scenario of widespread cybercrime and ransomware attacks that can compromise sensitive data and cause victims substantial financial loss.
“Keep protecting your Windows and use VPN for added security. Also, refer to a ransomware checklist to ensure that you’re prepared with the right cybersecurity strategy in case you become a victim of a cyberattack,” Deepak adds.
The innovative CEO’s objective is to bring his product sequence by chain to the hands of various banks and organizations, hoping to encourage them to pilot the program to see the cost productivity and value it has compared to their outdated systems. Remarkably, businesses are actively employing blockchain engineers for publicly-traded companies and banks. Major brokerages like Fidelity have launched their own NFTs departments, and institutions like JP Morgan have also built private blockchain projects internally.