How Blockchain is transforming banking, and why Ripple has the potential to shake up the entire industry
One of today’s most innovative innovations, as well as the foundation for future transformations. Among the many applications of Blockchain technology, transactions and money transfers have proved to be beneficial. It is a peer-to-peer distributed ledger technology that eliminates the need for third-party interference. As a result of all of this, Blockchain is a powerful tool for the banking and financial industries. In this blog, we’ll discuss how Blockchain is assisting banks and the role of Ripple in this.
Banks face a number of challenges.
The banking and finance industry has changed over time as a result of digitization. But the truth is that this technological advancement has also resulted in an increase in data breach incidents. Furthermore, the process of verifying and validating transactions takes time. Such bottlenecks have an effect on the banking process, necessitating a new technical intervention to increase the banking system’s performance. The following are some of the major issues facing the banking industry:
1. Interference by a third party
2. Time-consuming procedures
3. Data protection
4. Knowledge tracking
5. Resolution of a bogus argument
Although there are other issues, these are the ones that have the most immediate effect on bank functionality and performance.
The most likely solution is blockchain. Blockchain is seen by developers as the panacea for the bottlenecks that are preventing the industry’s development. The DLT technology is based on peer-to-peer networking, which eliminates the need for a third party, allowing all parties to communicate directly. Furthermore, it enables data storage through encryption, thereby improving data protection. Here are some examples of how Blockchain is assisting the banking industry:
Transaction clearance- In the traditional case, transferring money from one bank to another takes three days. The average transaction time lengthens as a result of this. Furthermore, large-volume transactions are a logistical nightmare for banks. Blockchain could be a viable solution to this issue. Ripple, a Blockchain service provider, could be useful in this situation. This platform can be useful in clearing transactions and settling claims. Ripple’s Current gave the bank a two-way communication protocol that allowed for real-time communications and claim resolution. This makes transactions on the Ripple Blockchain go much faster. Ripple currently has over 300 countries in over 40 countries.
Data protection and safety is the next critical parameter where Blockchain proves to be advantageous. The Blockchain’s transactions are all cryptographically encrypted. It ensures that all of the data in the DLT is safe and unaffected by data breaches or threats. The banking and financial industry is concerned about data loss and breaches. It ensures the personal information is kept completely safe.
Ripple and SWIFT are the two systems we’re after. They’re reshaping how cross-border payments can evolve in the coming years. SWIFT is an interbank messaging system that has been in use for nearly 45 years. SWIFT is now working to improve its offerings and efficiency in order to boost productivity; on the scalability front, SWIFT is competing with Blockchain. However, when it comes to data protection and performance, Blockchain is the clear winner.
The near future
Blockchain will disrupt the industry, and if you want to be a part of it, now is the time to enroll in the Blockchain Council’s blockchain certification program.