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Blockchain Technology In Banking

Why Blockchain Will Revolutionize The Banking Industry

Why Blockchain Will Revolutionize The Banking Industry

Why Blockchain will revolutionize the banking industry John Mason , 27 Dec 2017 - Banking , Blockchain Adoption Blockchain technology was invented back in 2008 . But its just now taking the internet, technology, and even banking by storm. Already, 24% of people around the globe are familiar with blockchain technology. That number is 41% if you only count people in North America. In 2015, 13 different blockchain companies secured $365 million in funding. And by 2016, they had raised well over one billion dollars to drive their operations. However, that speed of development doesnt always benefit the companies trying to keep up. The banking industry, for instance with all of the potential that blockchain technology offers for change, iteration, and development is particularly susceptible to getting overwhelmed. And thats probably why 70% of financial service leaders say that the speed of technological change concerns them. Theres no questioning whether blockchain technology will disrupt and revolutionize the banking industry. Leaders feel it coming. Some are ready. Most arent. But why and how is blockchain going to change banking over the next decade? To answer that question, lets first discuss how blockchain technology works. How does blockchain work, and how does that apply to banking? To understand how blockchain will revolutionize the banking and finance industry, you first need to understand how it works . For the sake of simplicity, you can think of blockchain as a mathematical model for processing, securing, and finalizing transactions. Naturally, banks process tons of transactions each day. Which is exactly why it will likely be one of the industries to change the most from this up-and-coming technology. The blockchain process is really quite simple. First, someon Continue reading >>

Blockchain Technology In Banking & Finance

Blockchain Technology In Banking & Finance

How Blockchain Technology Spawned Virtual Currencies Blockchain technology, less commonlyknown asdistributed ledger technology (DLT), is the underlying foundation that can create shared digital databases of entries that are unchangeable. Initially, the tech's developers conceived it as a way to centralizerecord-keeping (particularly of financial transactions) without the need for authorization by an thirdparty. Instead, multiple users with access to the data confirm the records. Blockchain started to gather mainstreamattention in 2009 when it becamethe underlying technologythat powers the cryptocurrency Bitcoin. Blockchain technology proponents believe it can be used to create secure and convenient alternatives to time-consuming and expensivebanking processes. And this theory seems to be gaining traction, as almost every major bank around the world is testing it. For example, banks are trying to create systems that decrease the number of participants involved in transactions. But some have invested more heavily than others. Some are investing in blockchain startups. Others are partnering with fintech companies that use blockchain (in fact, nearly all blockchain-based proofs of concept (POCs) developed by banks have been undertakenin conjunction withfintech partners.) And finally, multipleglobal banks including UBS, Goldman Sachs, and Morgan Stanley have published research on blockchain technology through in-house efforts; however, this research is mostly limited to explaining technical detailsand exploring theoretical use cases. Few banks to this point have constructedtheir own blockchain-based systems or in-house technology without the aid ofbanking or fintech partners. But a handful of largeglobal banks with the necessary resources to research and build large-scale p Continue reading >>

Blockchain: How Blockchain Technology Is Changing The Security Landscape In The Banking Sector - The Economic Times

Blockchain: How Blockchain Technology Is Changing The Security Landscape In The Banking Sector - The Economic Times

How blockchain technology is changing the security landscape in the banking sector Blockchain technology is being used to protect sensitive records and to authenticate the identity of a user. Blockchain, the technology that is used in the popular cryptocurrency 'Bitcoin', is revolutionary in many ways. It addresses multiple challenges associated with digital transactions, such as double spending and currency reproduction. Employing blockchain also reduces the cost of online transactions while simultaneously increasing authenticity and security . The upshot is that the need for payment processors, custodians, and reconciliation bodies is eliminated. These benefits are amongst the prime reasons why the technology is being extensively deployed within the banking sector. But, quite interestingly, the merits of blockchain technology are not limited to securing digital transactions alone. The IT infrastructure that is used to process digital transactions also benefits immensely from blockchain deployment, which offers multiple cybersecurity advantages to banking applications. Here's a look at how this happens: A blockchain is a series of blocks that records data (financial, in this case) in hash functions with timestamp and the link to the previous block. These blocks are anonymously stored with other stakeholders within a network. This eliminates centralised points of vulnerability which cybercriminals can exploit. Moreover, previous blocks cannot be overwritten in a blockchain and all transactional data is verified with every relevant stakeholder, making data manipulation is extremely impracticable. Blockchain technology is being used to protect sensitive records and to authenticate the identity of a user. Keyless Security Infrastructure (KSI) stores data hashes on blockch Continue reading >>

How Blockchain Could Disrupt Insurance

How Blockchain Could Disrupt Insurance

Blockchain is transforming everything from payments transactions to how money is raised in the private market. As it picks up momentum, will the traditional banking industry embrace this new technology or be replaced by it? Last September, JPMorgan Chase CEO Jamie Dimon took a stab at Bitcoin: Its worse than tulip bulbs. It wont end well. Someone is going to get killed. Lloyd Blankfein, head of Goldman Sachs echoed that thought, saying, Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud. Yet at the same time, according to a survey by The International Securities Association, 55% of companies polled are monitoring, researching, or developing solutions on top of blockchain. But this very loud and public backlash against cryptocurrencies from banks begs the question: What do banks have to be afraid of? Join us for a deep dive intoblockchain in 2018. Well cover newinitiatives, partnerships, andemerging areas with potential. Blockchain technology provides a cryptographically secure way of sending digital assets, without the need for trusted third parties such as banks. Further, tools such as smart contracts promise to automate many of the tedious processes within the banking industry, from compliance and claims processing, to distributing the contents of a will. Global banking is currently a $134 trillion industry. Banks help intermediate payments, make loans, and provide credit. The promise of blockchain as a trustless, disintermediated technology is to disrupt all of that, including: Payments: By eliminating the need to rely on intermediaries to approve transactions between consumers, blockchain technology could facilitate faster payments at lower fees than banks. Clearance and Settlement Systems : Blockchain technology Continue reading >>

Blockchain Definition | Investopedia

Blockchain Definition | Investopedia

Blockchain: The Backbone of Finance's Entire Future A block is the current part of a blockchain, which records some or all of the recent transactions. Once completed, a block goes into the blockchain as a permanent database. Each time a block gets completed, a new one is generated. There is a countless number of such blocks in the blockchain, connected to each other (like links in a chain) in proper linear, chronological order. Every block contains a hash of the previous block. The blockchain has complete information about different user addresses and their balances right from the genesis block to the most recently completed block. The blockchain was designed so these transactions are immutable, meaning they cannot be deleted. The blocks are added through cryptography, ensuring that they remain meddle-proof: The data can be distributed, but not copied. However, the ever-growing size of the blockchain is considered by some to be a problem, creating issues of storage and synchronization. The blockchain is perhaps the main technological innovation of Bitcoin. Bitcoin isnt regulated by a central authority. Instead, its users dictate and validate transactions when one person pays another for goods or services, eliminating the need for a third party to process or store payments. The completed transaction is publicly recorded into blocks and eventually into theblockchain, where its verified and relayed by other Bitcoin users. On average, a new block is appended to the blockchain every 10 minutes, through mining . Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system. Upon joining the network, each connected computer receives a copy of the blockchain, which has records, and stands as proof of, every transaction ever executed. I Continue reading >>

Banks And The Blockchain Blues

Banks And The Blockchain Blues

Jan 8, 2018 at 14:00 UTC|UpdatedJan 8, 2018 at 22:38 UTC Noelle Acheson is a veteran of company analysis and member of CoinDesk's product team. The following article is an exclusive contribution to CoinDesk's 2017 in Review . Like the misleading opening of a well-crafted thriller, the blockchain bustle in the banking sector is sending a confusing message. To see how, let's take a brief look at the timeline: In 2013, the news was full of banks shutting down bitcoin company accounts and worrying about being displaced by the innovation. This continued in 2014, while a handful of brave institutions began to look at the underlying technology. In 2015, we started to see the emergence of "thought leadership" from some incumbents, as well as promises of imminent blockchain trials and launches. These began to materialize and multiply in 2016, as use-case testing spread. And in 2017, we have seen an even greater number of trials, proofs-of-concept and prototypes, as well as the growth of financial consortiums. It appears that confidence is increasing. Given the seemingly frenzied activity over the past couple of years, we should be asking ourselves where the results are. Successful trials are great, but why have they not led to real-world use? Why is there so much applause and fanfare for work that has yet to show a practical application in banking? Why have countless promised deadlines come and gone with no follow-up? Superimpose the scarcity of implemented blockchain projects over the subsequent silence around most of the trials from 2015-2017, and the implied confidence that we are close to useful solutions starts to weaken. On the one hand, I don't want to belittle the considerable investment that has been sunk into blockchain explorations in finance. Far from it, the knowle Continue reading >>

'the Sky Is The Limit' For Blockchain Technology In Banking: Credit Suisse Banker

'the Sky Is The Limit' For Blockchain Technology In Banking: Credit Suisse Banker

'The sky is the limit' for blockchain technology in banking: Credit Suisse banker Blockchain technology can reduce the time to settle a leveraged buyout from 20 to 30 days to a matter of minutes, said James Disney, Credit Suisse's global head of software investment banking. Disney likened bitcoin to email: Bitcoin is the first "killer" blockchain technology app, just like email was the first "killer" internet app. Wall Street may not be crazy about bitcoin, but it is intrigued by its use of blockchain technology. Today, private equity transactions that use leveraged buyouts financed with debt can take 20 to 30 days to close and settle, said James Disney, Credit Suisse's global head of software investment banking. With blockchain technology, he said, that could take only a matter of minutes. "If you add up all of our volume over the quarter, that's hundreds of billions of dollars we're able to free up and take out of the system to use for other purposes," he told CNBC's "Fast Money" on Tuesday. Disney likened bitcoin to email. Bitcoin is the first "killer" blockchain technology app, just like email was the first "killer" internet app. He only expects innovation to continue. Credit Suisse has run experiments using blockchain technology in other parts of the business, he said. "I think the sky's the limit, really," he said. "We're in the very, very early stages here." Continue reading >>

Bank-based Blockchain Projects Are Going To Transform The Financial Services Industry

Bank-based Blockchain Projects Are Going To Transform The Financial Services Industry

Indonesia will be Asias next biggest e-commerce market Cryptocurrencies are constantly evolving, with popular currencies such as Bitcoin and Ethereum maintaining their popularity despite recent market corrections. At the core of both technologies is the cryptographically secure digital ledger known as the blockchain. Its a digital ledger where cryptocurrency transactions are recorded chronologically and publicly. Indeed, as the popularity of cryptocurrencies has grown, so has the banking industrys interest in blockchain for fintech, with an increased and focused push on bank-backed blockchain projects. Some of the largest projects underway include the IBM -backed Hyperledger Fabric project , the Utility Settlement Coin , and R3 s blockchain consortium, signifying a growing acceptance in institutional policy to support blockchain growth Currently, banks transact with each other by creating agreements, as one would when purchasing an item from a store. A common example would be a bank agreeing to purchase a specific amount of stock for a specific cash price from another. This process, often cumbersome and slow, takes up to several days and incurs the risk that one party may default or renege on the agreement. This period of time, known as settlement , is such an issue that an Oliver Wyman report identified it as costing the financial industry anywhere from $65-$80 billion a year. Blockchain projects have the potential to reduce, and possibly eliminate, settlement times due to their digital nature, ensuring the timely and secure processing of these operations. Other uses for bank-backed blockchain projects would include secured global currency exchange rate speeds and increased transaction security, among other benefits, eventually allowing for an overhaul of the banking Continue reading >>

5 Blockchain Use Cases In Financial Services

5 Blockchain Use Cases In Financial Services

5 blockchain use cases in financial services One of the most discussed topics in the financial services industry today is blockchain technology. We are beginning to understand what a blockchain is, but how can we best use this technology within our business? In this series we describe 5 blockchain use cases, such as smart contracts, identity management and share trading. We hope they will enhance your understanding of the opportunities and challenges of this technology, and we welcome your feedback and further discussion. Most parties in the financial sector already have a grasp of concepts such as bitcoins and other cryptocurrencies. These concepts work on the blockchain technology, which is a digital, distributed transaction ledger with identical copies maintained on each of the networks members computers. All parties can review previous entries and record new ones. Transactions are grouped in blocks, recorded one after the other in a chain of blocks (the blockchain). The links between blocks and their content are protected by cryptography, so previous transactions cannot be destroyed or forged. This means that the ledger and the transaction network are trusted without a central authority a middleman. #1. Blockchain speeding up and simplifying cross-border payments The transfer of value has always been an expensive and slow process. This is particularly true for cross-border payments. The blockchain is able to speed up and simplify this process - and also reduces the costs significantly. #2. Blockchain the future of share trading Share trading will soon be impacted by the blockchain. Utilizing blockchain technology allows for greater trade accuracy, and a shorter settlement process. #3. Blockchain the benefits of smart contracts One of the most promising applications Continue reading >>

Blockchain Technology For Banks | Accenture

Blockchain Technology For Banks | Accenture

How banks are building a real-time global payment network One of the most talked-about topics in the financial services industry today is blockchain. If fully adopted, it will enable banks to process payments more quickly and more accurately while reducing transaction processing costs and the requirement for exceptions. However, to capitalize on this potential, banks need to build the infrastructure required to create and operate a true global network using solutions based on this transformative technology. Our survey found that blockchain use is, indeed, top of mind among banking executives who lead payments businesses. Perhaps most critically, the survey revealed what executives believe must happen for blockchain to gain prominence globally. Thirty-two commercial banking professionals were interviewed to learn about the potential of blockchain / distributed ledger technology. Banks are definitely interested in blockchain. However, most banks we surveyed are still in the early stages of adoption, with about three-quarters either involved in a proof-of-concept, formulating their blockchain strategy, or just beginning to look into it. Regardless of progress, the most prevalent use cases banks are studying involve intra-bank cross-border transfers. Cross-border remittances, corporate payments, and inter-bank cross-border transfers are receiving comparatively less attention. But wherever they hope to deploy blockchain, executives expect a wide range of benefits, including lower costs, quicker settlement, fewer errors and exceptions, and new revenue opportunities. Nine in 10 executives said their bank is currently exploring the use of blockchain. A global network is critical to helping banks use blockchain to help transform payments at scale and help reduce risk of failure Continue reading >>

Deutsche Bank: Blockchain Opportunities Are 'huge' - Coindesk

Deutsche Bank: Blockchain Opportunities Are 'huge' - Coindesk

Deutsche Bank: Blockchain Opportunities Are 'Huge' Blockchain technology could represent a major shift in how companies conduct their business, according to Deutsche Bank's chief investment officer. In a slide presentation this month , Christian Nolting, also the banks global head of wealth, and Marcus Muller, global head of the CIO office, explained how digital currencies and blockchains work and predicted where they would go in the future. According to the presentation, the opportunities associated with blockchain technologies are huge, and could be fully put into practice within the next few years. The bankers predicted that roughly 10% of the global gross domestic product (GDP) would be tracked or otherwise "regulated" by a blockchain by 2027. We expect that the blockchain will change the business model of companies in a sustained way. The blockchain technology enables a faster and cheaper exchange of assets and financial products between individuals without an [intermediary], which reduces the asymmetry of information between the individuals. While blockchain technology is promising, cryptocurrencies are less so, according to the presentation. The bank is classifying digital currencies as "highly speculative" given their lack of intrinsic value or backing from a central bank. Though cryptocurrencies could represent an alternative to fiat currencies, especially in nations with runaway inflation, they need more regulation and security to become a proper asset class, according to the presentation. Digital currencies in general could evolve in a number of possible ways, with some of the main factors affecting their growth being government intervention and competition between different currencies. The potential for hard forks creating new currencies is also a potential Continue reading >>

Practical Examples Of How Blockchains Are Used In Banking And The Financial Services Sector

Practical Examples Of How Blockchains Are Used In Banking And The Financial Services Sector

Practical Examples Of How Blockchains Are Used In Banking And The Financial Services Sector Opinions expressed by Forbes Contributors are their own. While there are still several hurdles to overcome before blockchain transforms finance and banking as we know it, the potential cost and labor savings it could create for the global financial market are so appealing that many major financial institutions are investing millions in resources to research how best to implement it. I believe blockchain is a technological advance that will have wide-reaching implications that will not just transform financial services but many other businesses and industries. Billions of individuals and businesses are served and trillions of dollars are moved around the antiquated global financial system each day. Still heavily reliant on paper, albeit dressed up with a digital faade, there are many issues with this system that cause added expense and delays as well as make it easier for crime and fraud to cripple it. Despite the financial industrys resistance to change, blockchain and its expected benefits make it worthwhile. Many of you may be familiar with Bitcoin, a type of digital currency that operates independently from a central bank, but the tech behind that system most people are not familiar with is blockchain. There are many different blockchainspublic and privateand they allow anyone to send value anywhere in the world where the blockchain file can be accessed. Think of each chain as an online database stored in a distributed, peer-to-peer fashion. The storage devices for the database are not all connected to a common processor and each blockordered recordshas a timestamp and a link to a previous block. Cryptography ensures that users can only edit the parts of the blockchain that t Continue reading >>

Why Blockchain Is Essential To The Future Of Banking And Finance

Why Blockchain Is Essential To The Future Of Banking And Finance

Why blockchain is essential to the future of banking and finance Blockchain will begin to transform financial transactions in 2018. Lighthouse Partners' Pete Harris explains how this technology works, and what businesses can do to get started using it. Blockchain will disrupt a number of industries in 2018 including financial services. TechRepublic's Dan Patterson met with Lighthouse Partners' principal Pete Harris to discuss why blockchain technology will be important for the future of banks and financial institutions. The blockchain allows collaboration between several parties that may not know each other, or that are located in different geographical locations. It's like an account ledger that you insert information, similar to a database, he said, but once that information is in there, you can't easily change it. "Blockchain allows a level of trust develop," he added. SEE: What is blockchain? Understanding the technology and the revolution (TechRepublic) Specially, within the financial sector, blockchain technology has had a big impact on supply chain finance. Buyers and sellers need to have mechanisms they can know and trust to handle their financing, he said, and blockchain is being very actively piloted in that area. For companies looking to begin implementing blockchain, they must first become educated about the technology by talking with peers, customers, and vendors. Secondly, they can look at the open source community, and download credible, open source code, and begin to experiment with it. "You can definitely look at trying both cloud technology, and open source blockchain and analytics technology to begin to understand the technology, and begin to develop on it," Harris said. Continue reading >>

Know More About Blockchain: Overview, Technology, Application Areas And Use Cases

Know More About Blockchain: Overview, Technology, Application Areas And Use Cases

Know more about Blockchain: Overview, Technology, Application Areas and Use Cases Blockchain technology continues to redefine not only how the exchange sector operates, but the global financial economy as a whole. Bob Greifeld, Chief Executive of NASDAQ In financial markets theres always a mechanism to correct an attack. In a blockchain there is no mechanism to correct it people have to accept it.- Robert Sams, founder and chief executive of London-based Clearmatics. Blockchain technology has the ability to optimize the global infrastructure to deal with global issues in this space much more efficiently than current systems. Marwan Forzley, Founder of Align Commerce Everyone is talking about blockchain, the new technology in the FinTech Industry. The concept of blockchain has energized the financial services industry globally. The concept has already brought a disruption in the financial industry. LTP brings to you the overview, technology, application areas and use cases of blockchain. A blockchain is a public ledger of all bitcoin transactions that have ever been executed. A block is the current part of a blockchain which records some or all of the recent transactions, and once completed, goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. Blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block. To use conventional banking as an analogy, the blockchain is like a full history of banking transactions. Bitcoin transactions are entered chronologically in a blockchain just the way bank transactions are. Meanwhile, blocks, are like individual bank statements. The full copy of the blockchain has records of every bitcoin transaction ev Continue reading >>

Five Ways Banks Are Using Blockchain

Five Ways Banks Are Using Blockchain

Clearing and settlement, trade finance and syndicated loans are ripe for modernising What was mispronounced? Optional: help us by adding the time Give us your feedback Thank you for your feedback. Barely a day goes by without a fresh announcement about how banks are seeking to use blockchain technology to transform sizeable chunks of their business. Combining shared databases and cryptography, blockchain technology allows multiple parties to have simultaneous access to a constantly updated digital ledger that cannot be altered. The technology, which underpins cryptocurrencies such as bitcoin, was initially treated with scepticism by banks. However, this has changed dramatically. Blockchain isthe hottest buzzword in the sector, even if the recent flurry of cryptocurrency fundraisings via "initial coin offerings"is attracting intense regulatory scrutiny . Blockchain firms raised more than $240m of venture capital money in the first six months of2017, much of it from banks, including $107m raised by R3, the New York firm owned by 40 of the world's biggest lenders. That follows an almost doubling of venture capital investment in blockchain firms last year to $367m, according to KPMG's Pulse of Fintech Q2 report. Many of the new ventures by banks involve them setting up a consortium of like-minded companies or carrying out a "proof of concept" to test the potential of the new technology. In almost all cases there islittle to show in terms ofcommercialsignificance. So which the areas of bankingstand a serious chance of being transformed by blockchain? The Financial Times has spoken to almost a dozen bankers, consultants and analysts to come up with five areas of the industrymost likely to see aneffect. It is not the sexiest area of banking, but the tangled webthat records lo Continue reading >>

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