Blockchain technology and dApps To Streamline Payment SolutionsNovember 11, 2018
Banks are regulated in all jurisdictions as everything they do is about the money that belongs to the public. The prevalent blockchain technology is irresistibly established seamlessly with the cryptocurrency industry. The ICOs of the cryptocurrency market has already scared the banking industry to death. The popularity of the crypto is such that the banks cannot deny the benefits.
Banks like UBS are already looking to integrate blockchain technology to streamline their payment solutions for cross-border settlements, utility solutions, and for several business processes. Should this trend, pickup banks will be saving a lot of money as they will be cutting out intermediaries and commissions.
Banks are also investing in several startups developing projects based on blockchain technology because banks already are sure about the potential of this technology. While this technology can disrupt the way in which clients do business with each other, it can bring in a lot of changes concerning the speed of transactions, transaction costs, avoid bureaucracy when having to deal with multiple banking institutions.
Banks are having to strengthen their economic resources in a way to be self-sufficient if an economic downturn similar to the economic shock in 2008 should occur. The banks can save on the charges payable to intermediaries and clearing houses. From the point of capitalization, blockchain is an excellent solution for reasons related to saving a lot in operation costs. Thus, it will be possible for banks to invest more invaluable projects, thereby bringing in higher equity earnings for their investors.
When an inter-bank transaction has to take place, the clearance transaction time is more when compared to blockchain methods. For same day settlements, banks charge you more. Blockchain technology in the banking industry will be able to provide with efficient payment mechanisms, where inter-bank payments can happen in minutes in a secure ecosystem with low cost.
Blockchain technology is being explored with vested interest by banks to improve their settlements within their own branches and as well with other banks, precisely to improve intra-bank and inter-bank transaction standards.
Robust anti-money laundering procedures and know-your-client norms are made mandatory by regulatory authorities concerning blockchain transactions, thereby avoiding the illicit use of this technology by money laundering enthusiasts.
Bringing in procedures to prevent money laundering is one of the biggest challenges faced by the banking industry. Verifying client identity and the purpose of the transaction is essential to avoid the financing of terrorist activities.
There is a lack of uniformity in standardization procedures and policies meant for verifying the identity of clients and the purpose of the transactions. In the absence of uniformity, the verification process for each request gets to be time-consuming.
Integrating blockchain technology can bring in the verification process under one umbrella making the entire verification process seamless.
XinFin provides with XDC Hybrid Blockchain that is used to build dApps for different purposes. This technology can be customized to develop codes to suit the requirements of the banking sector.