‘Fintech’ has established itself as a fundamental part of the global financial services ecosystem. It’s a fascinating time for fintech, the portmanteau of ‘finance’ and ‘technology’, which is used describe new tech that seeks to improve and automate the delivery and use of financial services.
Over the last decade, Fintech has found its place in the innovation economy. Large global banks spun up corporate venture arms and digital incubators, investing in, acquiring, or copying solutions from emerging companies.
Among several technologies deployed, Blockchain is one of the most disruptive technologies changing the face of financial institutes, such as banks and insurance companies. Blockchain is transforming everything from payments transactions to how money is raised in the private market.
Introduction of Fintech in financial operations, such as mobile payments, money transfers, loans, fundraising, and asset management combined with blockchain offers exceptional safety and security to both financial service providers as well as customers. Resultantly, many banking, non-banking, and financial institutes are turning towards developing and deploying blockchain platforms.
Blockchain is taking the financial sector to a whole new level, as these technologies are capable of drastically reducing the operational expenses of these institutes and raise the level of customer satisfaction.
Several applications, such as share trading, digital identification, online payments, and smart contracts among others need a trusted and secure channel. Blockchain is one of the most effective and reliable media that allows Fintech companies and financial institutions to create secure financial products and services and bring innovation to the sector.
Blockchain technologies are designed to allow end-use industries and customers to have efficient, transparent, and secure financial processes. Besides, non-banking financial institutes have also started to adopt such technology to build a trusted partnership with their potential customers.
“Companies are confirming early blockchains, the value of the pilot projects and their readiness to officially put them into production,” said James Wester, Director of Global Blockchain Strategy Research at IDC. More and more financial institutions are using blockchain technology or are in the process of implementing blockchain capabilities given its myriad applications.
According to CBInsights, “For use cases that don’t need a high degree of decentralization — but could benefit from better coordination — blockchain’s cousin, ‘distributed ledger technology (DLT),’ could help organizations establish better governance and standards around data sharing and collaboration.”