Blockchain Will Revolutionise Banking

The banking sector has already been moving from traditional methods towards modern age banking methods which faster and more dependable outcome.  

As blockchain has gained popularity on a large scale since its introduction in 2008, this technology has and is presented its benefits to the banking sector.

Current Banking Concerns
One of the primary aspects of the banking sector is security. However, as in a number of countries, cash is still the preferred method of transactions. For example, in India, more than 90 percent of transactions are performed using cash. But as with most countries the Indian digital channels are increasingly popular. And this has increased the scenario for cybercrime in India as in other countries. 

The massive data breach of over 3 million debit and credit cards that occurred around 2 years ago in India has shown the prominent security gaps in the banking segment. 

Another area of concern is the increased occurrence of fraudulent transactions. Reports and sources reveal that there has been approximately a 20 percent increase in bank fraud cases over the past five years.

What Is Blockchain?
Blockchain can be referred to as a shared distributed ledger. It is capable of storing business transaction details through a series of the unbreakable chain. This information can be viewed by the parties involved in the transaction. 
It is a permanent information footprint of financial business transactions within a distributed network that cannot be altered or tampered. It is already being used as a digital currency in many countries. Its usage has also been preeminent for cross border remittance and trade finance.

The blockchain system can be characterised by permission-less and permission-based systems. The permission-less system refers to an open infrastructure. Any associated party can run a node in this system. New protocols can be implemented and there are no boundaries involved. The transactions in this system are smart contract based.

Permission-based blockchain can be defined as a closed ecosystem. In this infrastructure, information sharing is controlled through a set of authorizations. 

The information cannot to accessed or viewed by unauthorised persons. This setup can be very effective for centralized organisations like banks. They have full control of the network and the information stored within. 
Some noteworthy banks have already begun working on the blockchain technology. Bank of America and HSBC are to name a few.

Hyperledger in Blockchain
There are some of the known frameworks for implementing blockchain technology. Hyperledger is the most prominent of them towards implementing a permission-based blockchain. 
It is an open-source initiative that has been taken up for the advancement of cross-industry blockchain mechanism. It can be referred to as a blockchain-based framework for implementing permission-based blockchain platforms. This will collectively ensure the transparency and longevity of this entire infrastructure.

Blockchain Technology as an Effective Solution

Security
Blockchain can be effective in managing security concerns related to the banking sector. It is a safe and transparent network system that can be effectively used for storage and transmission of financial information. It is also decentralised in nature and there is a lower operational cost in maintaining this network.

Elimination of Mediators
Blockchain technology effectively eliminates the need for mediators within the credit or financial transactions. This result in a significant reduction in costs and banks can provide services to customers at cheaper rates.

Customer Identification
The distributed ledger technology of blockchain can be useful for building a dependable client identification system. This can be very useful in performing KYC for customers. The verification is done once and the information is stored permanently and securely for future use.

Verification
The verification processes related to the banking procedure can be fast-tracked with this approach. Since the details are already stored in the ledger, the relevant parties can access and verify information easily. It reduces the paperwork to a significant level.

Conclusion
Blockchain has functionalities that can be very instrumental in improving the banking processes. Some of the key areas of implementation of this technology can be information networking, transaction system, and ledger accounting. 
The network in the blockchain allows comprehensive communication among the participants within the system. The transactions are accounted for through the ledger accounts. The records of these transactions cannot be manipulated. The transaction system allows evaluation of funds based on a universal measurement unit that is independent of all other parameters.

Thus, it is an all-inclusive solution that can transform the banking industry. The transformation will not only make the entire system more secure but also cost-effective. It can be predicted that blockchain is set to positively reform the banking sector on a large scale.

DZone

You Might Also Read:

Bank Industry Is Turning On To AI Technology:

 

 

 

« Huawei To Be Given 5G Contracts In The UK
AI: Is Your Business Ready? »

CyberSecurity Jobsite
Check Point

Directory of Suppliers

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

Directory of Cyber Security Suppliers

Directory of Cyber Security Suppliers

Our Supplier Directory lists 8,000+ specialist cyber security service providers in 128 countries worldwide. IS YOUR ORGANISATION LISTED?

Syxsense

Syxsense

Syxsense brings together endpoint management and security for greater efficiency and collaboration between IT management and security teams.

IT Governance

IT Governance

IT Governance is a leading global provider of information security solutions. Download our free guide and find out how ISO 27001 can help protect your organisation's information.

TÜV SÜD Academy UK

TÜV SÜD Academy UK

TÜV SÜD offers expert-led cybersecurity training to help organisations safeguard their operations and data.

SecureNow Insurance Broker

SecureNow Insurance Broker

SecureNow is a commercial insurance broker based in India. Services offered include Cyber Risk insurance.

MNCERT/CC

MNCERT/CC

MNCERT/CC is the national Computer Emergency Response Team for Mongolia.

Cybernetica

Cybernetica

Cybernetica is an ICT company with activities in e-government, marine comms, data analysis and research in information security technologies.

Backup112

Backup112

Backup112 has been delivering professional cloud backup services since 2004.

SISSDEN

SISSDEN

SISSDEN will improve cybersecurity through the development of increased awareness and the effective sharing of actionable threat information.

Stealthcare

Stealthcare

Stealthcare is a full service, global cyber security firm offering solutions that educate, empower and protect.

Approach

Approach

Approach is a leading provider of cyber security consulting and secure application development services in Belgium.

PhishX

PhishX

PhishX is a SaaS platform for security awareness that simulates Cyberthreats, train people, while measure and analysis results, reducing Cybersecurity risks for People and Companies.

Security Engineered Machinery (SEM)

Security Engineered Machinery (SEM)

SEM provides comprehensive end-of-life solutions for the protection of sensitive information in government and commercial markets.

Prompt

Prompt

Prompt supports the creation of partnerships and the setting up of industrial-institutional applied R&D projects for all ICT sectors.

BrandProtections.Online

BrandProtections.Online

BrandProtections.online offer end-to-end customer support solutions to help protect against threats which may affect your brand online.

Systems Assessment Bureau (SAB)

Systems Assessment Bureau (SAB)

Systems Assessment Bureau is an internationally recognized ISO Certification Body with a unique vision of “Excel together with global standards”.

BT Security

BT Security

BT provides telecommunications and network infrastructure services to keep businesses around the world connected and secure.

Binarly

Binarly

Binarly is a global firmware and software supply chain security company founded in 2021.

KYND

KYND

KYND has created pioneering cyber risk technology that makes assessing, understanding, and managing business cyber risks easier and quicker than ever before.

Cylerian

Cylerian

Cylerian is a Next Generation SaaS Security Platform - One unified cloud platform to achieve your security, compliance, and operational objectives.