How advanced is blockchain technology in Fintech companies?

Invented back in 2008, blockchain technology is taking over the financial industry. The technology depicts changes that can streamline different business operations. Remember, blockchain technology is still in its infancy.

In the next few years, it might be the biggest tech.

What Is Blockchain Technology?

Blockchain is an innovative technology that enhances transparency in transactions. Users can record all their financial details in a way that is difficult to alter, hack, or erase. The technology duplicates recorded information across a network of computers in the blockchain.

Companies That Leverage Blockchain Technology in 2021

Among many companies the ones that are in advanced models of using blockchain but with rugulated are Sino United ,Chime in fintech sector and Parhaimmat Nettikasinot Corp in casino industry.

Here are other 7 ways in which blockchain is changing the finance and banking industry.

1. Banks Can Easily Access Customer Personal Data and Financial History.

Blockchain technology revolutionizes access to big data. The tech duplicates all customer details and transactions in a unified system. Customers will no longer rely on regulations to control their data. They can choose who to give it to and how they can access the same.

Sino United is developing a platform that will help Fintechs leverage big data without the risk of cybersecurity. Fintechs will need access to bigger chunks of data to accommodate the modern consumer's ever-dynamic needs. Big data access will help them tailor user-centric products and services.

2. Fast, Efficient, and Prompt Payment Transfers

In the current banking model, businesses rely on counterparties to process payments. Customers also experience the same when buying from online or physical stores. The cycle involves a six-step process dominated by financial services companies. The money comes from the customer to the merchant, then proceeds to the acquirer, MasterCard Network, and then the issuer. The process is tedious and costly. This is especially when someone has to do multiple transactions per day.

Sino United is working on cloud computing mobile payment, which basically relies on blockchain technology. The current mobile payments rely on “near field communication” (NFC) technology. Cloud computing mobile payment will enhance payment security, owing to the growing number of mobile payment technology users. Enhanced security for mobile payments means more consumers will now trust digital currencies.

Chime also uses blockchain technology in its Pay Friends feature. The feature allows customers to send and receive money instantly. Customers can also use the feature to buy digital currencies on peer-to-peer marketplaces like Paxful.

3. Research on Customer Identity

The current banking regulations hold financial institutions liable for their customers’ identities. Banks verify their customer’s identities through other institutions to okay some transactions. For instance, banks may need to access customers' credit history. They collect credit scores from credit bureaus before processing loans. The process is tedious and costly in the long run.

There is ongoing research around blockchain technology to mitigate the identity crisis. With blockchain, banks will no longer need bureaus to verify their customers' identities. The technology will require customers to reveal their identities. This is especially when transacting in a banking blockchain. Once customers post their identity, they cannot erase or alter it. This innovation will help curb money laundering.

Chime requires all their customers to declare and verify their legal identity name before using the Pay Friends features. On the other hand, Sino United is developing blockchain technology that offers safe, decentralized storage. This feature will help Fintechs mitigate money laundering.

4. Customers Cannot Reverse Transactions or Records

Blockchain technology makes it impossible to reverse transactions illegally. Once the details get posted in the central ledger, the whole blockchain duplicates it. Moreover, multiple computer algorithms arrange transaction details in a permanent, chronological order. The data is accessible to all users in the blockchain.

Transactions on Chime’s Pay Friends feature are irreversible. Users can send direct, instant payments to other users without trading proof. Pay Friends leverages blockchain technology to enhance the customer experience.

5. Automation of Transactions by Computational Logic

Different sectors are expanding their operations to accommodate the overwhelming consumer wants. In the future, financial institutions will likely handle more transactions than ever before. With outdated technology, this could cause delays and customer inconveniences.

Blockchain technology features a computational logic that can automate all the transactions. Such programming can automate transactions between nodes. This technology is the reason behind Chime’s success in handling many transactions. The process of sending money via Pay Friends is instant and automatic.

6. All Financial Institutions Can Access a Distributed Database

There is a need for transparency among banks to ensure fair competition. In the current banking model, institutions leverage a double-entry accounting system. This method relies on human integrity and requires third-parties to validate the entries. The system is costly and encourages unfair practices among rivalries. When unscrupulous players alter their records, customers are the ones who likely suffer. Ponzi schemes emanate from such practices.

Blockchain technology introduces a distributed database for all industry players. Each party within the blockchain will have access to the database. In that case, there will be no single party that controls the data. Banks can verify information posted on the ledgers without using intermediaries.

7. Peer-to-Peer Transfers for Pseudonym Transactions

Not everyone wants to leave a trail in digital transactions for security reasons. Besides, some people just don’t trust financial institutions. Enormous transactions can get you flagged. Blockchain technology offers a peer-to-peer platform where transactions can remain in pseudonyms. For instance, users get a unique 30-plus-alphanumeric character that they identify with. This tech makes it possible for transactions to proceed between blockchain addresses.

Anonymous transfers make it easy for businesses to close private deals. It will also fuel crowdfunding through anonymous contributions. Consumers prefer services that guarantee privacy in the current world of uncertainties.

Consumers Vouch for Blockchain Technology

Consumers are beginning to realize the benefits of blockchain technology. It enhances their banking experience.

Financial institutions have to shift to a technology that supports the same. Blockchain technology will make it possible to move money with zero paperwork.

It will eliminate transaction costs and problems that come with redundant regulations.

By the look of things, this could be our future milestone.