Blockchain Use in the Financial Services Sectors

Abstract

This chapter discusses various use cases of blockchain technology in the banking and financial services sectors in North America. The topics discussed focus on the advantages that blockchain technology offers compared to business-as-usual models. For instance, blockchain technology can streamline and shorten the securities settlement process on exchanges, credit card payment transaction processing, and insurance claim settlements can all be optimized in terms of cost and efficacy. According to The Blockchain Training Institute, 90% of banks in the USA and Europe are considering blockchain technology to enhance the efficiency of their operations, while seven out of ten banks are aiming at using blockchain technology within the next three years. Arguably, the population destined to benefit the most from offering blockchain-based financial and banking services is the millions of inhabitants in parts of the world who do not have access to conventional banking and lending services. Blockchain technology has great potential to become a game-changer for this underserved population. To further explain, anyone with a cell phone and a banking/lending app can effectively conduct financial transactions without using a trusted intermediary, such as a conventional bank. Blockchain technology can also be an effective tool in managing microloans to remote territories worldwide where financial services simply are not available. A blockchain solution can enable financial services to farmers and trading participants to get their business started or expanded, thereby creating a real opportunity for these populations to combat extreme poverty effectively.