Blockchain Technology in Banking and Finance

Embracing Block chain Technology for Transforming the Banking and Finance Industry

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Blockchain Technology in Banking and Finance

Blockchain in Banking and Finance

Banks and financial institutions are under constant pressure to maintain their asset quality and capital adequacy while meet growing customer demands. Apart from this, growing competition from Fintech companies and increased regulatory pressure to modernize their legacy IT systems are further escalating the problems for the Banking industry. This calls the need for a technology solution that can overhaul the existing banking infrastructure.

Blockchain – A shared distributed ledger can aptly address the pain points of the banking and finance industry by streamlining the processes and removing inefficiencies.

How Can Blockchain Help?

Preventing of Frauds:

Since, Blockchain is a distributed ledger, the information/data once uploaded on the ledger is shared across all the participants. Furthermore, it works on the consensus mechanism wherein vote of each participant is mandatory for a transaction to occur. This helps prevent losses caused as a result of documentary frauds while help saving on reconciliation costs.

Forex Volatility:

Blockchain technology can be used to make quicker and easier cross-border payments thereby helping banks and customers to make the most of the forex marketplace by achieving transparent deal from the market players. Furthermore, this technology helps in overcoming the vulnerabilities to cyber-attacks during cross border transaction.

Reduced Processing Time and Cost:

Blockchain can cut banks’ infrastructure costs for securities trading, international payments, and regulatory compliance. Furthermore, the speed of execution of banking processes for securities settlement etc. becomes quite fast, which reduces the capital, which banks have to hold against each trade.

Cuts Intermediaries:

This technology has the potential to transform the trading processes involved in the capital market, which is currently dependent on the intermediaries who delay the processes making the entire settlement process costly and time-consuming. Blockchain eliminates intermediaries and brings in the much-required transparency.

Simplifies the KYC process:

Complying with KYC (Know your customer) and Anti Money Laundering is becoming an extremely costly affair for banks as these processes has to be done independently by banks. Furthermore, banks also have to upload the KYC data on a central database, which could be retrieved by them for doing the needful for new, as well as existing customers. With a Blockchain powered system in place, such repetitive efforts can be removed thereby providing banks with real-time updates.

Simplifying Trade Finance:

The complex transaction process involved in trade finance can be simplified if all the big shots including shippers, manufacturers, etc are boarded on the Blockchain network. Here the smart contract functionality of Blockchain plays a pivotal role in executing a trade deal by triggering actions after certain pre-set terms and conditions are being satisfied.

Why Sofocle?

As one of the early adopters and leading players in the Blockchain space, Sofocle offers robust solutions to its Clients across various industries. For the Banking and Finance Industry, Sofocle offers its’ market ready product ‘sofoPay’ that is designed to address the pain points of the Banking and finance industry. Built on Hyperledger fabric, sofoPay uses the smart contract functionality for digitizing and streamlining the banking processes. It creates a transparent ecosystem where all the participants involved can interact with each other without any hassle.


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