5 Use Cases to Bring the Blockchain into FinTech

April 12, 2018

 

Riding the wave of global momentum behind the crypto ecosystem, blockchain is powering disruption across the financial services arena. The secure, anonymous, and decentralized open ledger system has thus far served as the infrastructure of cryptocurrency, but is seeing increasing real-world applications that are altering business processes, particularly in FinTech. In light of blockchain’s growing spotlight, here are five use cases of the technology in the financial sector:

 

  1. Securing financial data — blockchain technology is powering both hardware and software in the cybersecurity domain. Providers are delving into secure offline storage, holding cryptocurrencies as real-world assets and managing digital wallets. Permissioned blockchains are particularly important here as their centrally managed databases combat cybersecurity risks and protect invaluable financial data and transaction records.

  2. Managing index data and tracking stock issuance — with the emergence of blockchain, FinTech firms are able to track and manage share issuance and ownership, as well as index data more transparently and securely. Big industry players have partnered on large scale efforts to share index data via the blockchain. Another recent development: Delaware took a big step towards mainstream blockchain adoption, legalizing its use to record stock ownership. With that decision alone, Delaware opened to door for a million plus businesses to track stock ownership through a blockchain.

  3. Simplifying payment systems — cryptocurrency wallets powered by blockchain have proliferated, allowing users to manage personal cryptocurrency keys and transact over crypto exchanges securely and with streamlined verification processes. Accessible cryptocurrency loans and mobile payments systems on the blockchain are just a few examples. 

  4. Working in tandem with regulatory bodies — embracing regulation to drive innovation is not something often associated with the wild west of crypto. However, regulators have begun to adopt the use of sandbox test environments to gain a deeper understanding of the technology. These joint regulatory sandboxes allow firms to test out new technologies in a limited live environment without doing a full-scale roll-out subject to the litany of regulatory requirements.

  5. Redefining open banking — cross-border payments. decentralized crypto-banks, crypto-financial services networks, and P2P lending marketplaces are only a few examples of the ways blockchain is impacting traditional banking. Cross-border payments, for instance, have long involved complex verification and settlement processes. Through instantaneous data share, blockchain streamlines the process for added efficiencies and lower cost transactions across global banks.

 

FinServ enterprises are following the lead of innovative FinTech and adopting blockchain to power various use cases across their operations and offerings. Talk to one of our experts about how blockchain can offer unique solutions to your enterprise business.

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