Blockchain is no more an anonymous word today. The term got introduced in the market back in 1991 and now it has gained a lot of value in digital marketing industry. Though the technology keeps introducing, blockchain is one such technology, which has been in limelight since a decade. Moreover, blockchain is not a national technology rather it is a global technology benefiting diverse sectors globally.
But which sector is taking advantage of blockchain technology the most? Any guesses? It’s finance industry guys.
Yes, you read it right. The finance industry is the most vulnerable sector which requires improved protection. The industry is making big investment in blockchain technology to provide security to variety of financial transactions. That’s why blockchain becomes the best solutions to ensure high security while eliminating fraud, lowering operational risk, and reducing administrative costs.
As per the study, more than 90% of US financial institutions have already started to explore the opportunities of blockchain technology in finance. You don’t believe? If no, then read the 5 important advantages of blockchain in finance industry enlisted below.
#1. Tight security
Finance industry is one of the most confidential industries which require tight security to save data of clients. As you know that online sector is prone to hackers and spam. It doesn’t take a minute for hackers to access your data or misuse them. Therefore, blockchain technology utilizes advanced security compared to other platforms or record-keeping system. Moreover, a shared ledgers help bank better secure transactions information. Blockchain basically reduce the risk of someone either capturing transaction information or diverting payments. In fact, the data of the transaction is also unchangeable once it has been recorded or verified.
#2. Good in error solving
We human tend to make mistakes while recording financial data and making transactions, right. Even a minor error can create a blunder for your business which you can’t bear. Thanks to blockchain technology, which makes it easier for you to handle errors and coordinate with other market participants. Additionally, banks and financial institutes can easily trace transactions more quickly and helps in finding error. So, you can find errors even before a transaction is completed.
#3. Provides high transparency
The term ‘transparency’ is very much in demand, whether you’re in digital marketing, finance industry, or any other sector, everywhere transparency is required. In blockchain technology, the word transparency is highly associated with it. Though transparency is a great advantage, many users consider it a threat. What kind of transparency, blockchain technology offers? Here are some points explaining it:
- Confidential transactions
- Zero-knowledge proof technology where a user’s data is verified without disclosing it.
- Enigma secret contracts. This network allows encrypting data within a smart contract.
- Cryptocurrencies which focus on privacy
#4. Makes transactions faster
Next advantage of using blockchain in finance industry is faster transactions. With blockchain technology, transactions can be done within a matter of seconds. It makes transaction faster than other traditional methods. With blockchain, banks and financial institutions are able to avoid the intervention of middleman. This ensures that customers complete transactions at a quicker pace. Ultimately, this will result in customers and banks able to complete the process more transactions in the future.
#5. Enhanced data quality
The last advantage of using this technology in finance is data quality. How blockchain enhance data quality? Basically, it can store any type of information and access it by following particular procedures. In fact, the technology uses smart contracts to automatically verify and complete a transaction. It ultimately provides a data quality and makes it resistant to any interference from outside. No doubt, every firm be it accounting, finance, health care, or any other want data quality that blockchain can provide.
To sum up
With these 5 advantages of blockchain in finance, you now have enough idea about why blockchain is becoming a need in today’s growing world. However, there are many more advantages you can find or read about on Google. Undoubtedly, blockchain technology advantages discussed above in this article. Which allow finance industry and banks improve their transaction, provide data security, and protect clients’ data from hackers. Additionally, if you want accounting services for your business, you can consider Kayabooks.
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