Our present banking system is full of regulations in all aspect of its operation. It is so regulated in the sense that it affects the speed of every transaction, due to the many bureaucracies within the system. With the introduction of blockchain technology and the popularity of the cryptocurrency, banking executives, who are known mostly to conservative in dealing with their clients, are now admittedly becoming a fan of this new technology. Most of them are now embracing the idea that blockchain technology and stay. It is now being embraced by many industries and will soon fully reshape, with the integration of the blockchain technology in their system.
Large banks are even now in the process of experimenting, using the technology in their business processes, they are testing the technology, integrating it into their system. They invest in many projects to try to reach a blockchain based solutions.
Characteristics of blockchain that makes it popular
• Secured. With the blockchain technology, all transaction which includes transmitting and storing data are secured.
• Speed. Speed is one characteristic that will benefit from this technology.
• Transparency. When in the current banking system, all transactions are being kept secretly, with the blockchain technology, there is so much transparency in all the transactions within the network.
• Decentralization. While our banking system practices centralization of all information, it is not the case in the blockchain technology. Here, all information will be relayed to all players in the system.
• Cost Efficient. With the traditional banking system, operations will go through many people, before along the process. Application of a loan will need many signatories before the applicant receives the money. Those people will be an additional expense for the bank. With the blockchain technology. Those mediators will be eliminated.
How do our banks react with the popularity of blockchain technology and its eminent embrace into it?
For banks, the coming of blockchain Technology hit them into angles. However, the first one, which is the positive impact, dwarfed the negative one.
1. The positive Impact. Blockchain technology will allow banks to save millions of dollars in processing costs. The technology requires fewer documentation and less mediation in every transaction, and this will result to cost efficiency for the company.
2. The negative Impact. Blockchain technology reduces the cost of capitalization, which allows small players to invest in the financial industry. This is the lighter scenario, which the present bank will have to face.
Blockchain technology’s introduction and the worlds embracing it is eminent. This technology is here to make life easier for us. The banking system will continue to grow. This new technology will not at all eliminate them. It is here to reshape the current banking and financial system. They have to adapt to the technology and find a way to integrate it into their system. Many other industries are already embracing this technology.
All of those industries gain and benefited from it. If they do, our banking and financial system will do so.
Official links for more details,
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