Blockchain for Banks: Revolutionizing Financial Services in 2024 | Idealogic

The financial sector which is one of the most conservative industries has in 2024 embraced blockchain technology. What was once considered a revolutionary concept in the world of banking and finance and was met with a lot of doubt by traditional financial institutions is now an integral part of the modern banking software and has revolutionized the financial industry.

A recent PwC report reveals that more than 85 percent of financial services firms are either exploring or implementing blockchain solution. This shift shows that there is need for banks to adopt new technologies in order to survive in the market. This revolution is being spearheaded by the banking software companies that are providing the banking solution that is fully integrated with the blockchain technology.

1. Cross-Border Transactions: It is also fast and cheap

Therefore, by 2024, the need for improved and cheap cross-border payments is unprecedented. The conventional mode of transferring money across borders is not only time consuming but also expensive where it charges between 5–7% of the total transaction amount and take 2–3 days to complete the transfer. Using blockchain technology especially through Ripple, these challenges are solved since it is cheap and fast to transact. For instance, Ripple’s XRP does away with the need for banks to hold foreign currency reserves, a process that is time consuming and expensive. Consequently, banking software companies are now adopting blockchain and it is being incorporated into mobile banking applications and is propelling the use of blockchain based payment systems.

2. Improved Digital Identity Verification

With the increased uptake of digital banking services, there is need for better authentication of customers’ identity. Due to the increasing cases of identity theft and data breaches, the use of blockchain in the management of digital identity is secure. Using the blockchain technology, banks are able to improve the identification process and security since it is decentralized and cannot be altered. Such projects as SecureKey, which have already been implemented with the support of large banks, show how blockchain can ensure the proper identification of individuals and the security of their data, using it only with the customer’s permission.

3. Improving the Security

As the cyber threats become more and more advanced, securing the monetary transactions is crucial. There are several features that are difficult to hack in the Blockchain, including the records that cannot be altered, the use of two keys and the fact that it is a decentralized system, which makes it ideal for fighting fraud. Once a transaction is done and saved in the blockchain, it cannot be changed or deleted, hence improving the accuracy of the information. This is because the data in the blockchain is distributed across various nodes and hence it is hard to attack one point of the system. These features are being included in the electronic and mobile banking applications by the banking software developers to ensure that the customers are able to access the services in a secure manner.

4. Digital Bookkeeping and Audit

Blockchain technology is set to transform financial management and auditing services through provision of a more effective system of recording information. This is because the detailed and unaltered structure of Blockchain makes it easy to provide accountability and transparency in the financial reporting systems hence suitable for compliance and auditing. This paper believes that as banks embrace the use of blockchain, the time and effort that is required in accounting, and auditing will be greatly reduced, as well as the accuracy of the records.

5. Reducing Costs

Another important benefit that blockchain can bring into the banking sector is the reduction of costs. The traditional banking system is very costly owing to the fact that there are many intermediaries involved and many formalities to be followed. Blockchain does away with the intermediaries thereby lowering the cost of transactions and other related overheads. This has helped in reducing the cost and this is being reflected in the prices of banking services. Looking into the future, we can predict that the costs of banking services will decrease even more by 2025 as the technology of block chains is constantly developing.

Conclusion

Looking into the future and specifically at 2024, it can be stated that blockchain is not a hype but a significant part of the future of banking. In the domain of financial services, blockchain is changing the way of processing cross-border transactions, increasing the security, decreasing costs and increasing the capability of business continuity. Banks that adopt this technology will be in a good place to succeed in the future that is characterized by the use of technology.

For more information please refer to the full article —Blockchain for Banks: Revolutionizing Financial Services in 2024 .

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