Blockchain in Financial Services.

Blockchain is an exciting emerging technology in the financial services industry. Over the past few years, it has proven its potential to drastically alter the way we do business not only in the financial sector but across nearly every industry globally. 

As the technology and its various application areas continue to evolve and progress, blockchain is steering enterprises to greater transparency, traceability, and operational efficiency for a wide variety of business transactions and contracts.  

So, what do Blockchain and its related technology mean for the financial sector and its customers?

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The financial services sector works on the shoulders of intermediaries such as banks that help build trust between transacting parties like lenders and borrowers. Blockchain offers a mechanism to build trust without a centralized authority in place. The major advantage of eliminating intermediaries is the potential to lower transaction costs and regain control from powerful financial intermediaries.

Blockchain is still in its infancy and large-scale commercial applications need to be developed and scaled for it to reach an optimum level of adoption and be accepted across the industry as one of the key technologies to be used in the future. 

Here are some of the areas the sector has initiated the adoption of blockchain. 

Securitization: Market leaders view blockchain as a way of reducing the need for agreement and diligence, enhancing reporting and compliance through real-time access to incorruptible asset-level information, achieving exceptional execution, and developing new asset classes and structures through expedited innovation and lower barriers to entry. 

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Payments and Settlements: Using Blockchain to realize real-time processing of a transaction, apportion and enforce business rules, bring down costs by eliminating intermediaries and simplifying infrastructure, mitigate the risk of data loss, enhanced end-to-end transparency and predictability.   

Intercompany Settlement: Transform the foundations for intercompany relationships and transactions for large institutions with Block Chains ability to sustain a single source of indestructible truth, automate intercompany transactions with smart contracts and compliance mechanisms, and offer visibility across distinct systems, substantially bring down intercompany imbalances, harness the real-time reporting rather than the periodical end and simplify and standardize inter-company supply chain processes. 

Smart Contract Testing: Smart contracts are a central component of blockchain technology. For end-users, it is crucial to examine smart contract code for accuracy, security, uniformity, and efficiency. Equally significant is the testing of functionality and the controls around it. 

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Tokenization: Non-fungible tokens (NFTs) offer the financial services sector a means to render physical assets on a blockchain. Enterprises are still figuring out ways to leverage the value NFTs and tokenization can offer to existing business processes and financial products. 

Syndicated Loans: Enhancing the efficiency of execution and servicing of loan by leveraging smart contracts to regulate loan terms and conditions, distributed ledger technology to streamline communications and transactions tracing, transparency, and incorruptible data to clear up time-intensive reconciliations and faulty payments.  

Blockchain and Verbat Technologies

Verbat’s approach to blockchain is based on innovation, backed by our experience and capability and a strong focus on excellence, oriented to help businesses towards innovation. The future will be built on blockchain and hence we realize the importance of developing and scaling blockchain solutions in tune with customer requirements. If you are curious to hear more about block chain and its related technologies contact us.

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