Blockchain technology in the banking

sector
The blockchain is the underlying technology for crypto currencies like Bitcoin.
Experts say that implementing blockchain technology in banking sector is
poised to solve multiple challenges facing the banking industry by facilitating
faster, secure, and more transparent transactions.

Today blockchain has become one of the most talked about technologies in the
financial services industry. Blockchain technology in banking sector allows
banks to easily connect with new business and payment ecosystems. The
financial services industry, currently, is advancing in experimenting with the
technology. They have undertaken a number of initiatives that are driving its
progression for yielding several important benefits in the context of the transfer
of assets within complex business networks. Blockchain technology allows all
participants in a network to easily share a system of records. This helps in
providing consensus, immutability, and provenance around the transfer of
assets.

Blockchain can be potentially disruptive because it consists of distributed

ledgers that lead to new business models. Let's take a look at the applications
of blockchain in banBENEFITS OF BLOCKCHAIN TECHNOLOGY IN
BANKING SECTOR OUTWEIGH THE COSTS
Fraud Prevention
Blockchain technology is based on the concept of sharing information across
different parties and consensus during transactions, and thereby helps in saving on
reconciliation cost between banks. This also helps in preventing losses because of
documentary frauds.
Forex Volatility
Blockchain technology is used in cross-border payments and can, therefore, help the
consumers and banks in taking advantage of the forex marketplace for gaining the
best deal transparently from the market players.

BLOCKCHAIN TECHNOLOGY BRINGS RESILIENCE IN THE BANKING

SECTOR
As blockchain consists of a distributed architecture by design, it allows the network
of banks to be operated by all permissioned nodes in the ecosystem. Thus, all
important members of the payment ecosystem such as banks and other financial
institutions can effectively become the participating nodes in the blockchain network.
If an untoward event such as a cyber attack affects the ecosystem, and some nodes
of the network are unavailable, the consensus algorithms in blockchain ensure that a
transaction can be approved by the remaining nodes in the network.

REDUCED TIME FOR PROCESSING FOR BANKS

Most banking processes are linear and hierarchical in nature. These processes are
similar to the assembly line of the manufacturing industry such as maker-checker
processes. The maker checker-approver process helps the banks in gaining control
and puts the emphasis on ownership of decisions. Blockchain technology can help in
improving the speed of these processes by reducing decision-making time across
the organizations.
Thus, blockchain technology has the potential to address several limitations of the
current banking processes by streamlining, simplifying, modernizing, and enhancing
the traditional siloed design of banks. ks.