What comes to mind when you think of Blockchain, does Bitcoin pop up? Most of us only think of Bitcoin when Blockchain is mentioned. True, the success of Bitcoin is what put Blockchain on the map. However, numerous other sectors can apply Blockchain technology to their systems and processes. In this article, you are going to learn about the benefits that Blockchain in finance can bring.
Benefits of Blockchain in Finance
A recent KPMG research shows that there is a 40 percent increase in efficiency due to the tamper-free property of Blockchain. Blockchain allows businesses to streamline their processes and remove complicated mechanisms that were previously necessary to ensure correct and accurate records.
Once you add something to Blockchain, you cannot erase it. This property of Blockchain ensures that when you do a financial transaction, no one can tamper with it. Security and Data accuracy improves while fraud reduces due to the immutable records available publicly.
Improved customer experience
Companies can use Blockchain to share information with clients and vendors. This lets customers get better services faster; and thus, more sales opportunities for companies.
With Blockchain you are able to automate contracts to perform a wide variety of functions. How is this done? Several linked if/then statements that automate and implement contractual terms and clauses are inserted in a contract. If a clause is activated, Blockchain automatically processes it. Smart contracts reduce disputes in addition to saving time and resources. A few examples of this application include; payrolls, proxy voting, and trade clearing.
Due to the use of advanced cryptography and fail-safes, security is the name of the game. You see, Blockchain is a series of blocks. These blocks are linked to each other. The blocks are connected to a big network of computers that communicates in real-time to ensure data integrity within the blocks. Users can add new data to the chain. However, they can’t tamper with or delete existing information. The same applies to transactions. Once done, they are recorded, verified, and finally validated. There is no alteration after validation.
Higher availability of capital
With Blockchain, you can expect less capital consumption. The reason – Blockchain is fast and efficient. With quicker payment processes and trade settlements, you will end up using fewer resources hence the availability of more capital.
Blockchain improves accounting (and accountants)
Blockchain brings with it a significant change to the industry. Adapting to its approach is a considerable boost to accountants and accounting as a whole. Imagine error-free accounting. Blockchain technology is a substantial boost to accountants and only makes them better and more efficient at their jobs.
While not many people have adopted Blockchain technology, it is here to stay. The existing authorities must start implementing Blockchain in their systems to get these benefits.
In this article, you have learned of a few ways that the finance sector can apply Blockchain
. Some of the most notable applications in Blockchain include;
- Reduced fraud
- More security
- Smart contracts
- Increased efficiency.
With the above points, you can clearly see the advantages and benefits that the finance sector can get by using Blockchain.