Blockchain in Financial Markets: Changing Techno Environment

Changes and innovations at every level of life is very certain” and these small changes and innovations result in an impact to a large extent in multiple sectors either ‘positively or negatively’.

blockchain in financial markets

Hence if we talk about Blockchain, we have this myth that this is only going to affect the ‘IT SECTOR’ since people working on coding and other IT projects will soon face the threat in terms of getting employment since everything is going to be replaced by ‘Artificial Intelligence’.

But we often forget that ‘if a coin is dropped in a sea, every sea animal living in that area gets affected by it might be majorly or in a very small amount’. The same way Blockchain and Artificial Intelligence have left huge advancements in changing the techno environment in financial markets too.

Do not be very happy if you know about blockchain because even a kid knows that, where we all are actually lacking is in understanding the impacts and effects that it would bring to banking & financial markets and what exact future we all can expect out of this.

The banking& the financial sector is the one that deals with either lending or borrowing money. So we as an individual can understand that we want our issued money to be safe wherever we put it across in the mode of FD’s etc. 

The very same way banks and even no one would like to get bankrupt; hence they carry a big responsibility on their shoulders in terms of taking care of money. This is the very fast-moving sector where a lot of manual work is required too. People have seen various obstacles to move forward in this industry:

Maintaining a big amount of data

Cybercrime

Huge manual data entry

Financial crises

Managing people’s and their own money

Auditing of multiple operations

Minimizing infrastructure costing

So with the implementation of Blockchain in banking & financial markets, one can expect the following positive changes mentioned below and have proved to be a solution to the above challenges that are being currently faced by financial markets:

Minimized costing

Increased security

Improved pace

Making the entire process smooth and simple

Removing incorruptibility

Smoothening foreign exchange process

 

process in capital market and blockchain in financial markets

 The Company named‘JP Morgan’ has already adopted using blockchain and others including ‘Goldman Sachs and Bank of America’ are also currently doing their research on Blockchain to bring cryptocurrency in these financial markets.

Let’s discuss some more examples of how Blockchain is helping in different financial business domains:

Commercial Banking:

  • Unique competitive products/services
  • Loan funding on a real-time basis
  • PFM(Personal finance management)

Trade & Supply Chain:

  • Direct interaction by completely removing correspondent banks
  • Multiparty tracking on a real-time basis
  • Products trade finance

Payments Procedure:

  • Smooth payments which are Small/Retail/Wholesale
  • Introducing Virtual Wallets
  • Replacing manual payments via Coinbase, Bitpay, etc.

Capital Markets:

  • Pre-trade & Post-trade execution: Real-Time Basis
  • Registries, servicing, documentation of assets
  • Record keeping
  • Final settlements

Risk Management:

  • Management from the risk of auditing
  • Management from the risk of Fraudulence
  • Management from the risk of multiple operations
  • Management from the risk of capital & liquidity
  • Management from the risk of counterparty

Administrative Compliance:

  • Automating Administrative Compliance activities
  • Administrative process optimization
  • Enforcing sanctions

Let us hope that these new technological changes will positively affect our financial industry.

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