5 blockchain technology use cases in financial services
Powering innovation in the industry
One of the most discussed topics in the financial services industry today is blockchain technology. We are beginning to understand what blockchain technology is, but how can we best use blockchain technology within our business? In this series we describe 5 blockchain technology use cases, such as smart contracts, identity management and share trading. We hope they will enhance your understanding of the opportunities and challenges of blockchain technology, and we welcome your feedback and further discussion.
What is blockchain technology?
Most parties in the financial sector already have a grasp of concepts such as bitcoins and other cryptocurrencies. These concepts work on the blockchain technology, which is a digital, distributed transaction ledger with identical copies maintained on each of the network’s members’ computers. All parties can review previous entries and record new ones. Transactions are grouped in blocks, recorded one after the other in a chain of blocks (the ‘blockchain’). The links between blocks and their content are protected by cryptography, so previous transactions cannot be destroyed or forged. This means that the ledger and the transaction network are trusted without a central authority – a ‘middleman’.
#1. Blockchain technology – speeding up and simplifying cross-border payments
The transfer of value has always been an expensive and slow process. This is particularly true for cross-border payments. Blockchain technology is able to speed up and simplify this process – and also reduces the costs significantly.
Read the use case: ‘#1. Blockchain technology – speeding up and simplifying cross-border payments‘.
#2. Blockchain technology – the future of share trading
Share trading will soon be impacted by blockchain technology. Utilizing blockchain technology allows for greater trade accuracy, and a shorter settlement process.
Read the use case: ‘#2. Blockchain technology – the future of share trading‘.
#3. Blockchain technology – the benefits of smart contracts
One of the most promising applications of blockchain technology is the smart contract. It can execute commercial transactions and agreements automatically. It also enforces the obligations of all parties in a contract – without the added expense of a middleman.
Read the use case: ‘#3. Blockchain technology – the benefits of smart contracts‘.
#4. Blockchain technology – how to improve online identity management
When identity management is moved to blockchain technology, users are able to choose how to identify themselves and who will be informed. They still need to register their identity on the blockchain somehow, but after that, they can re-use that identification for other services.
Read the use case: ‘#4. Blockchain technology – how to improve online identity management‘.
#5. Blockchain technology – loyalty and rewards
Blockchain technology offers many benefits, including transparency and traceability of transactions. This will help banks and insurers to create a more captivating loyalty and rewards program that fits 24/7 performance management and enhances engagement.
Read the use case: ‘#5. Blockchain technology – loyalty and rewards‘.