The Fintech industry is one of the growing industries for digital payments. Some of the Fintech is working with the blockchain technology or helping to work with the blockchain technology. Fintech works for the management of mobile payments, money transfer, loans, and assets management. Now a day every online website or firm is using the online payment option for the money transfer. This growing demand has given rise to blockchain technology. Blockchain plays an important role in Fintech management. It is creating a revolution in the Fintech industry.

What is Blockchain and how it is changing the industry?

Everyone who is using the online tools for the management of the financial transaction is using Fintech service. It is used for the online business and it has significance on how to do business in the future.

Blockchain:-

Blockchain is the type of decentralized system for maintaining the transaction data for permanent and immutable records of financial transactions. Blockchain stores the update of data in a continuously updating list called a block. Blockchain uses cryptographic link for the security of the block. Each block generally consists of three elements. The three hash pointer, a timestamp, and transaction data.

What is a key feature of blockchain technology?

The feature of Blockchain technology is as follows:-

1. Decentralized system:-

A blockchain uses the decentralized network operates on the peer to peer basis. The data stored across the network not store centrally.

2. Distributed ledger:-

A distributed ledger gives access to the sharing of the ledger activity between multiple parties. Every computer in the distributed network maintains a copy of the ledger to ensure transparency and prevent single point failure (SPOF). All the replicates are updated and validated simultaneously.

3. Permanent immutable Record:-

The foundational design of blockchain does not allow the modification of data. All blockchain network follows a certain protocol to validate the new block. The record written in one block cannot update without updating all the subsequent block. It is one of the advantages of blockchain.

The blockchain is a new technology for professional working in the financial sector. The future of the blockchain depends on the use of technology by the customer or user. The efficiency of the blockchain depends on the use of different customers or Fintech ecosystems. The blockchain industry increasing at a rate of 23 % every year.

What is the Fintech ecosystem working with the Blockchain?

The Fintech ecosystem is the fluid environment creating the winner and losers in the market.

Participants in the Market:-

Government, customer, Fintech startup together forms the ecosystem. As the new technology is introducing in the market the demand and complex problems are arising in the industry.

Financial Institution working in the domain:-

The traditional financial institution working is changing the work style to give the perfect market outcome. Many of the institutes are working with payments, wealth management, and lending to update the services. Banks are investing in innovation and ideas for the development of new technology.

Fintech Startup:-

The global investment in Fintech is increasing as per the data available in the year 2018. The startup is finding a way to deal with increased regulation, higher cost, and big infrastructure.

Government Role in Blockchain technology:-

The government role is vital in blockchain technology to have to evolve the Fintech by balancing the activities carefully. They must encourage innovation without inhabiting the evaluation. As the government is developing the new policies and programs there must be active engagement by the stakeholders and Fintech ecosystem.

How is the Blockchain giving disruption in the Fintech system?

Blockchain is the new technology for the revolution of the Fintech industry. As the financial services are moving from the exploring phase to the application phase. Fintech needs to understand the role of the Blockchain in the industry.

The adaption in the service must balance otherwise they will create disturbance in the service.

How does Blockchain technology used in Financial Services?

The following point gives the use cases of the Blockchain technology

1. Smart contract:-

The smart contract is the code running on top of the blockchain contain a set of rules for which the contract is used. When the predefined rules are meet agreement is automatic works. The smart contract can enforce, validate, and perform the agreement.

2. Digital Payment:-

The money transfer or value transfer is always a slow and expensive process. The blockchain use will reduce the time of transaction. The process will be much faster as compared with the traditional banking institution.

3. Digital Identity:-

The digital identity is verified with the blockchain user or the applicant has to choose to whom they are trying to verify the identity. The user can decide who can verify the identity. Every time a new identity registration is not required.

4. Share Trading:-

Share trade generally involves the third party person as a stockbroker and exchange processer. The blockchain removes third party person for stock settlement. It will speed up the process.

Conclusion:-

The blockchain will be useful for bank transactions. But there will be a need for a few years to give the mainstream to Blockchain. As technology increases there will be a need for a continuous update in the blockchain process.

Sources:-

https://medium.com/@Techracer/how-is-blockchain-disrupting-the-fintech-industry-3640eaae9e89

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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