The blockchain market is expected to grow by USD 39.7 billion by the year 2025, according to a recent study. Simply put, blockchain technology involves the creation of blocks of information that are stored in chain formats. As new blocks are added to the chain, a digital ledger is formed. Blockchain technology helps to rule out the midpoint failures, delays, collateral costs, credit risks, and exchange spreads. Since security is of utmost importance in the financial and banking sector, blockchain technologies have various applications in this sector. Blockchain has stepped up today from just being a bitcoin transaction enabler. It is used in many industries today, including the medical and banking sectors.
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The rapid adoption of Blockchain technology
Blockchain is being used for recording and validating transactions and decentralizing the processes. It completely rules out the requirement of third-party authorizations. Blockchain technologies in the financial setup offer several advantages as follows:
- Decentralization; provides more freedom
- Less amount of paperwork
- No third-party authorizations required
- No intermediaries for transactions
- Increased transparency
- Maintains data integrity
- Increases transaction and storage security
Financial services offered by companies all around the world are on a cusp of change. Decentralized public networks are going to be implemented increasingly to aid the financial agencies in alleviating performance problems and increasing their flow of capital income. As we dive further into this information age, online data will increase by leaps and bounds, and the more we advance, the more prone to data breaches we would become.
So, implementing a robust cybersecurity protocol has become more essential than ever. In such a scenario, companies are increasingly vouching for the benefits which the blockchain technology provides them with. Blockchain currently is used in more than a thousand cryptocurrencies, and the number is increasingly growing. The financial industries have recognized the potential of blockchain and are rapidly adapting the same for better revenue generation, increasing their efficiency and reducing the risks associated with business operations.
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Latest blockchain tools enabling better security protocols
Fintech is booming with digital innovations, but as it advances, matters related to cybersecurity are also important, and the right measures should be levelled up. To increase the convenience of users, financial institutions have acknowledged digitization of their services and products so that users can manage everything through their smartphones. However, this has led to a whopping increase in the number of cyber-attacks. Blockchain can be leveraged to mitigate cyber-attacks, especially concerning financial institutions. Let us have a look at some of the use cases of blockchain-backed tools and companies which help maintain better security standards for financial institutions:
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Chainalysis
Backed by a company based in New York, this platform helps to build tools for monitoring the exchange process of cryptocurrencies. This blockchain technology is used by financial institutions as well as government organizations to detect fraudulent transactions, fraudulent trading, compliance violations, and laundering.
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Circle
The Boston-based Circle is responsible for overseeing investments and exchanges in cryptocurrency worth $2 million on a monthly basis. The platform supports seven cryptocurrencies for investment and transfer purposes.
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Coinbase
It is an exchange platform for users to sell and buy digital currencies. Trading happens in a protected manner. The wallet details and passwords are stored securely in a database, and the company also performs vigorous background checks for the employees. All the processes happen in an encrypted manner.
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Javvy
It stores and trades cryptocurrencies. It has a concept of a universal wallet for all the details. It is a decentralized model that has a biometric-enabled login facility. AI is embedded in the platform for the detection of fraudulent activities.
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Mobile Coin
It is developing solutions for companies who are not yet ready to handle ledger information. The crypto technology aims at replacing third party vendors, and all the transaction data is just between the peer to peer sharing entities. This increases the transparency of the transactions as well as boots the security.
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Founder’s bank
Based in Valletta, Malta, it is going to be the world’s first bank which is decentralized. The owners of this bank are the people who purchase their token equity. The company encourages and implements storage techniques that are decentralized. Robust encryption methods and an extensive public ledger aim at making the trading and storage of cryptocurrencies safe and secure. The bank will be owned not by a corporation but by the public.
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Santander
To improve the security of their international payments’ services, this bank has adopted blockchain technology. The technology aims for secure transfer of payments between the user accounts present all over Europe and South America. It is one of the largest banks in the UK. It has more than $1.74 trillion worth of assets.
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Civic
It is a blockchain-based platform that creates an ecosystem that enables individuals to gain insights about who all have their information. It has become an integral part of the fintech and identity security industry. The users have smart contracts to decide where their information can be shared. If there is a data breach or unauthorized access, the users, as well as security departments, are alerted.
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Ocular
It is an anti-money laundering compliance platform. Blockchain technology is used here to ensure there is no data manipulation. The platform is targeted towards cybersecurity and fintech industries. Biometric systems are being utilized in these platforms to ensure data authenticity and detect fraudulent practices.
All the tools/platforms mentioned here leverage the power of blockchain technologies to maintain and improve data security. Blockchain is changing the face of financial industries by getting embedded into various facets like payment gateways, remittance markets, trade financing, stock exchange, share trading, syndicated lending, hedge funds, crowdfunding, record keeping, verifying customer identities and more.
