Banking and other financial services already have seen significant blockchain adoption (or at least investment), partly due to an ever-growing need for enhanced security and availability of mobile and online banking in emerging markets.
Blockchain technology today is being applied in potentially transformative ways, including:
- To manage customer identity and data privately and safely, while enabling smoother transactions and financial settlements
- To store important financial records in a decentralized network, bringing added privacy and security to banking
- To support a large library of smart contracts that power decentralization of processes, such as dispute resolutions
Regulatory environments, which vary from country to country, represent perhaps the strongest headwind. There still is a fair amount of confusion and fundamental misunderstanding about how blockchain technology can facilitate and improve banking globally. (Case in point: a fear of money-laundering.)
Institutional resistance to the blockchain, the mass adoption of which can eliminate “middlemen” — code, rather humans, will handle many processes — also may encounter resistant, despite the more transparent, efficient and cost-effective benefits. [Dr. Michael Yuan]