Question

what could be the Impact of the blockchain on banking industry ?

Answer 1

Solution:

Banks serve as the critical storehouses and transfer hubs of value. As a digitized, secure, and tamper-proof ledger, blockchain could serve the same function, injecting enhanced accuracy and information-sharing into the financial services ecosystem. As a digitized, secure and tamper-proof ledger, blockchain could serve the same function injecting enhanced accuracy and information sharing in the financial services eco-system.

Swiss bank UBS and UK-based Barclays are both experimenting with blockchain as a way to expedite back office functions and settlement, which some in the banking industry say could cut up to $20B in middleman costs.

In May 2019, Barclays invested in Crowdz, a blockchain-based B2B payments startup that helps companies collect payments and automate digital invoices.Blockchain is also growing as a solution aimed at reducing the cost of cross-border transactions, which accounted for 27% of global transaction revenue in 2017. Blockchain company Ripple has partnered with financial institutions like Santander and Western Union with the goal of improving the efficiency of cross-border payments.

Blockchain startup BanQu is working with AB InBev to facilitate payments to cassava farmers in Zambia. BanQu’s platform tracks the farmers’ products through the supply chain and then provides digital payments to farmers via their mobile phones, even if they don’t have bank accounts.JP Morgan is also entering the blockchain space with the JPM Coin, which it intends to use to facilitate transactions between institutional accounts.All these characteristics make the blockchain more reliable, very promising and the in-demand solution for banks and other financial institutions.

In conclusion, banks will adopt the blockchain technology even though slowly for the same reasons they adapt to any change; to save money or increase their customer base, not forgetting to stay relevant.