Why Are Banks Boarding the Blockchain Train As Well?
2017 has undoubtedly been the best year for blockchain technology and cryptocurrencies owing to the steep surge in the value of most cryptocurrencies. This rapidly growing interest in cryptocurrencies has been attracting a lot of attention from banking sector as well. In 2016 a whopping 93% of global financial executives knew about blockchain technology’s potential disruptive nature while only 3% of them were actually preparing projects considering the risk associated with the risk associated, as per a Forrester survey. Our software development company is working on blockchain projects from banking to real estate domain.
Bank’s Cryptocurrency – Ripple
There are a number of reasons people know about blockchain technology through Bitcoin and actually confuse the two being the same at times as well. Blockchain technology for the masses is Bitcoin and nothing beyond and this is not only because Bitcoin was the first digital currency to hit the mainstream a few years ago but also because that it what introduced blockchain technology to the people. Also, Bitcoin happens to have the highest value against the dollar in the market among various other cryptocurrencies.
However, there has been another cryptocurrency, Ripple that’s been making waves especially in the financial sector. Ripple has risen in value by a margin of 10,000% this year alone thus gaining a lot of attraction and offering the highest return in value in 2017.
Blockchain technology basically refers to a secure and decentralised system that allows storing and transferring of data while eliminating the problem of double spending and ensuring each transaction is completed safely and securely. The decentralised nature of blockchain technology does not provide any one entry point which makes it impossible to hack making it an ideal solution for financial sectors for digital transactions.
Each cryptocurrency created had a specific purpose and a niche market to target. For example, Bitcoin was created as a store value to facilitate buying and selling of items. Ripple on the other hand was created specifically to simplify bank transfers which is exactly why it is attractive to banks and other financial institutes. Ripple with its blockchain technology promises to make bank transfers and other transactions a breeze compared to the traditional methods of transactions. Transactions through blockchain can be carried out almost instantly which is a complete opposite of the regular banking systems where one has to wait for days to finish a transaction.
Looking at the obvious disruption that blockchain technology and Ripple can bring to banking sector and the way it can transform the entire industry within a few years and help banks improve their services overall, banks have started boarding the blockchain train. Just last year in June Ripple announced its partnership with numerous banks around the globe which included Italy’s Unicredit, Spain’s Banco Santander, the Canadian Imperial Bank of Commerce, and Switzerland’s UBS. These partnerships were based on testing the technology before bringing it to the masses. There are many app development companies in UAE working on blockchain based mobile apps.
Blockchain technology in banking sector will allow faster transactions which in turn will heavily benefit businesses and e-commerce industry.