Blockchain in Banking
The earliest blockchain use cases were within the currency and payment realm. For this reason, and perhaps because of the overall surge in market utility and capitalization of blockchain projects, the financial industry has taken a significant interest in this nascent technology, heralding a new era of blockchain banking.
For example, last year Barclays placed themselves at the forefront of adoption by implementing the security and transparency aspects of blockchain technology into their transaction processes. This multinational bank did so by announcing a first of its kind, blockchain-backed credit transaction between Ornua and Seychelles Trading Company. It included the first trade documentation to be encrypted and managed on a blockchain network. The use of a decentralized ledger to store and send the documents saved the bank significant time and money on the transaction, a far cry from the costly ten-day process it would have taken Barclays via traditional channels.
What is interesting in this case is that Barclays clearly found a competitive advantage in incorporating blockchain technology in banking. Other transnational giants are also taking notice. The accounting and professional services company Deloitte has recently published a report which outlines key advisory principles for blockchain adoption on a global scale, elaborating on areas such as macro implementation in governmental and legal practices, or cybersecurity controls. Comprehensive, data-driven research by a trusted information source such as Deloitte clearly signals the demand for information by similar financial institutions who want to understand how their banks, hedge funds and similar organizations can find their own blockchain use cases.
While it may not be as media-worthy as fintech or trading, the method of recording loans and securities by banks could also take advantage of blockchain technology. Accenture has recently estimated that the global financial industry could save up to $10 billion by using blockchain to store and process clearing and settlement. Similarly so, when a US company raises capital using a syndicated loan it can take up to 19 days for the transaction to be completed by the banks. After that, if the loan is switched to another bank, or it is repaid early, the relevant documentation is still often processed by fax.
Similar to transferring credit documentation to a decentralized ledger, blockchain banking will be able to save significant amounts of time and billions of dollars in capital by choosing to migrate all loan and security documentation to an agile ledger which streamlines document storage and processing times. Banks will be able to benefit from blockchain by being able to bypass the rising costs of maintaining aging infrastructure and complying with regulatory burdens.
Accepting blockchain technology in banking and the broader financial system could improve the industry by paving the way for a much more responsive and flexible infrastructure. Santander, Spain’s biggest bank, estimates that implementing blockchain technology could save the financial industry up to $20billion per year.
Blockchain and Financial Technology
On the side of fintech and digital innovation which is already beginning to take hold of the financial industry, blockchain examples are already being implemented to solve traditional woes by allowing international payments at reduced costs and shorter processing times. It is also important to remember that originally cryptocurrency was invented to bypass central regulatory bodies and outdated legal infrastructure revolving around banks and the financial industry. By exploring financial solutions within blockchain, we potentially open up avenues for new legal landscapes and perhaps even more efficient and customer-friendly business models.
Blockchain in Healthcare
When it comes to the global healthcare, anything from wearables to the progress of medical research can be made more efficient and secure.