With the rapid development of current technology, Blockchain is projected to be a strong breakthrough for the industrial revolution in 2022 and play a role as a bridge to help develop many other industries for better development. In particular, the fields related to Fintech will make a breakthrough in the next few years when combined with Blockchain technology, which is the foundation and leverage to bring Fintech to another successful position.
In fact, Blockchain has existed, developed and applied to a variety of industries such as Education, Automation, Healthcare, Insurance, Banking and Financial Services,... Currently, Blockchain is still one of the advanced solutions when ensuring the security of transactions and cutting costs effectively for the Fintech industry.
Read more: What is Fintech and How it apply to market?
Why Blockchain should be applied to FinTech Industry?
As you all know, FinTech always faces dilemmas such as cost, security, data integrity,... But, when Blockchain was born, challenges and difficulties for Fintech is almost eliminated.
Vietnam and the world are following the trend of digitization. Specifically, popular forms in Fintech such as online payments, e-wallets or most especially cryptocurrencies are growing. Since then, the need for process improvement and security has also increased. Therefore, SMEs, Financial Institutes, Banking, need to actively develop and integrate Blockchain into their Fintech ecosystem to make the most of the value that technology brings.
ITC Group currently has a lot of experience in developing Blockchain technology integration systems for Startups to leading enterprises. If you are looking for related services, you can contact us for advice and the best service experience.
6 Ways Blockchain Technology address and eliminate FinTech Industry difficulties
To develop a Fintech business, you should look for companies with expertise and experience in Blockchain development and integration with Fintech. Thereby, the services and finance of enterprises will be operated and managed effectively when reaching consumers. At the same time, you can minimize the cost of system construction, operating costs for banks and cut down the time to perform procedures, shorten the working process and ensure the efficiency
1. Smart Contract
- A smart contract is a new form of the contract created and managed in digital form. Through Blockchain, businesses can quickly create smart contracts automatically after having the necessary information. Simultaneously, the contract signing procedures are not binding on documents and face-to-face meetings. As a result, you can expand the trading market for your global business.
2. Get rid of Fraud Risks
- With Blockchain, Financial institutes can apply cryptography to protect transaction information and users' data. The verification process from Blockchain helps detects crumpled, folded edges, opacity detection, and fraud. When the system is attacked by hackers, the cryptography takes them effort and time to approach information. Simultaneously, the decentralized platform, which developed from Blockchain, facilitate solutions to detect any fraudulent activities
3. Transboundary transactions
- As mentioned above, Blockchain paves the way for Fintech industries, particularly, Banking, Insurance, or Securities companies to proceed with transactions worldwide with all customers from every corner of the world. To clarify, Blockchain simplifies all payment procedure and process as well as get rid of the paperwork. However, The authenticity and confidentiality of information are still guaranteed.
4. eKYC (electronic Know Your Customer)
- eKYC is a new solution that has been developed and innovated to adapt globalization process. Blockchain helps eKYC work effectively and transparently in collecting user ID, profiles and e-Signatures ... and complete the securities opening process and trade within a day. Thanks to that, financial institutions can reduce paper works and simplify procedures for their customers. This increases trust among users because they can access and know what information is collected and how it is protected.
Read more: What is KYC and eKYC?
5. Digital Identification
- Blockchain combined with eKYC helps to eliminate cases of fraud related to network security and registered scams. In the past, the rate of abuse and impersonation of others has affected the financial industry and customer trust for a long time. However, Blockchain technologies facilitate to upgrade and revolutionize digital identification. Stakeholders and people with access can reconcile information while ensuring accuracy and security with the ability to prevent masquerading or security breaches and attacks.
6. Payments and Trading
- Blockchain directly affects money flows. Specifically, online payments or cryptocurrencies are evidence for change of virtual currencies and re-define the way people evaluate the potential of virtual currencies. On the contrary, the phrase "e-wallet" today has also become popular everywhere such as MOMO wallet, Zalopay, ...
- In addition to virtual currencies, Blockchain helps online transactions to be actively and transparently managed, minimizing cumbersome paperwork from normal banking transactions to securities transactions. Securely stored transaction history and information optimize the transaction lifecycle and can prevent forgery or fraud from hackers.
There is no doubt that Fintech has increasingly become more innovative and productive for banks, securities, and other financial institutions. With blockchain, Fintech solution and its effectiveness have transformed all financial procedures, processes and global recognition. Businesses can not only get rid of fraud risks but they can also decline thousands of expenses with high level of safety and transparency.
If you are looking for Blockchain technology for your Fintech solution, please contact us for better consulting and benefits.