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Blockchain Technologies, a game changer

Blockchain technologies are one of the biggest game-changers to affect business in recent years. The disruption created by the coronavirus pandemic has led to the rise of Blockchain within the financial services sector, enhancing the status of cryptocurrencies as one of the most profitable assets in the world.

Cryptocurrencies are now beginning to be adopted by the establishment, with regulators and central banks across the globe actively adapting their regulatory approaches to integrate Blockchain technology into traditional finance and payment instruments. Countries such as Dubai, Singapore, Canada and a number of offshore jurisdictions are creating favourable conditions for fintech companies while the Bank of England (BoE) is also beginning to respond to the potential of this technology.

Blockchain technology has the potential to advance the growth of financial services companies.

It offers a number of key advantages, including:

• The absence of intermediaries
• Low transaction costs compared to banks
• Lower risks compared to traditional currencies
• The versatility of many different methods of trading and exchanging money
• The potential to create additional value in financial transactions
• Added value in the implementation of KYC identification procedures, the verification and completion of customer documents and the creation of registration procedures
• A reduction in operational risks
• Enhanced security of customer data and transactions.

Blockchain Challenges

Despite the many benefits, there are undoubtedly potential challenges. Risks to regulatory systems could include the inability to fully regulate virtual assets and the prospect of losing control of citizens’ financial accounts due to their anonymity.

However, by integrating Blockchain technology into classic banking through the fintech ecosystem, organisations could collaborate to create a more open, transparent infrastructure for trading financial instruments, wealth platform offerings and private banking.

The financial industry is under constant pressure to adapt, enhance customer experience and add greater value. The adoption of Blockchain technology could enable companies to achieve this and more.

At PayCompliance, we have 18 years’ experience of supporting the success of payment institutions across 65 countries. Our comprehensive product range includes consulting, financial auditing and licensing services.

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