5 Fintech Disruption Opportunities Created by Blockchain

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Blockchain is one of the most innovative and useful technologies that is crucial in accelerating cryptocurrency acquisition, given how technological advances have proven to be revolutionary for a wide range of industries.

Fintech companies are increasingly incorporating blockchain technology into a variety of financial services. Fintech technologies must be integrated into existing service systems and extensions by financial infrastructures, conventional banks, and credit unions in order to thrive in the next five to ten years.

According to Deloitte’s 2020 Global Blockchain Study, blockchain is among the top five strategic goals for up to 55 percent of executive leaders. By 2023, the C-suite team will have implemented over 70% of blockchain technologies and applications for mainstream acquisition.

Many fintech startups, corporations, big tech, vendors, and venture capitalists are focusing on blockchain in the disruptive areas listed below. Furthermore, blockchain can disrupt a number of government central bank processes, including emerging digital currencies and regulations.

1. Smart Contracts’ Rapid Adoption

Via blockchain transactions, smart contracts are revolutionizing the way business is done. This helps to eliminate the need for escrow services and time-consuming paperwork. Smart contracts on the blockchain are currently used in massive financial infrastructures, like JPMorgan. The business uses smart contracts on an Ethereum-based blockchain to facilitate transactions in the 2.3 billion repurchase agreement market, allowing cash and US Treasury transfers to be paid out instantly.

Financial infrastructures may use smart contracts to leverage blockchain technology in a variety of ways. These are effective processes that can be scaled up across national boundaries. Large-scale financial institutions’ fintech leaders are ecstatic to bring new capabilities and solutions to their current platforms. Fintech’s popularity continues to accelerate financial services consolidation. Fintech applications, transparent APIs, and partner networks must all be integrated by SMEs.

2. Personal Data Protection and Identity Fraud Management

Personal data and digital identity management are becoming increasingly important in the fintech industry. Given the evolution of cybercriminals in tandem with technological advances, identity verification solutions remain the most important in financial infrastructures. Cyberattacks cost credit unions and financial infrastructures billions of dollars per year, according to reports. Data from blockchain transactions is sent to decentralized ledgers, where it is encrypted, stored, and protected in an application.

Blockchain transactions, when used correctly, can be advantageous for authentication and successful in combating fraudulent activities. Consider the following scenario for personal privacy. By replacing confidential business information and data with a type of cryptography known as Zero-Knowledge Evidence, Ernst & Young’s Nightfall using GitHub makes public blockchain and transactions private and stable.

3. Payouts and settlements in a matter of seconds

As a new wave of technologies washes over fintech, the rapid adoption of mobile payments and digital wallets will continue to grow. Smart contacts, mobile wallets, contactless payments, mobile payments, and identity authentication are all components of blockchain payment technologies. Artificial intelligence and machine learning may be needed in future use-cases.

Fintech transactions based on blockchain will continue to grow, and in less than three years, they will go from speculation to mainstream. Through using credit or loyalty cards, mobile wallets will continue to replace physical wallets. According to Statista, digital payment transactions in 2020 would have reached USD 6.68 billion, rising at a rate of 22.1 percent per year.

4. Growth that is more automated

Customer and business-to-business funding and credit will see increased demand this year. Fintech can rapidly penetrate the B2B, C2C, and B2C sectors in the form of blockchain-based applications. Credit unions and financial infrastructures are now commonplace, allowing fintech applications like Plaid to provide near-real-time credit approval. Large-scale manufactured payment providers and networks that are joining the card installment space are currently verifying the trends toward financing and credits.

5. Credit Cards, Digital Currencies, and ATMs: The New Normal

The use and adoption of digital currencies is growing rapidly around the world, thanks to two major factors: the COVID-19 pandemic and rising consumer demand. Digital transactions are precise, secure, productive, dependable, and convenient, and they can be performed at any time and from any location.

Many global economies, such as M-Pesa, WeChat, and Venmo, are vulnerable to digitization and are becoming cashless. Financial transfers and payments are made easier with the help of these apps. Blockchain has shown to be useful in the delivery of private and decentralized digital currencies. According to Motley Fool, the three major cryptocurrencies, Bitcoin, Ethereum, and Ripple, had a combined market value of approximately $1 billion.

Many global economies, such as M-Pesa, WeChat, and Venmo, are vulnerable to digitization and are becoming cashless. Financial transfers and payments are made easier with the help of these apps. Blockchain has shown to be useful in the delivery of private and decentralized digital currencies. The three major coins, Bitcoin, Ethereum, and Ripple, had a market cap of about USD 340 billion in November 2020, according to Motley Fool.

Looking Forward

Fintech firms are reshaping the dimensions and environment of financial transactions with the aid of blockchain, there is no doubt about that. Traditional financial transaction approaches are being transformed into more stable, efficient, and successful procedures that aim to improve reputation and trust between consumers and companies, resulting in a more transparent relationship. Customers will continue to purchase innovative mobile-based devices in the coming years if successful legislation and protection measures continue to evolve at a rapid pace.

In the coming years, Bank-as-a-Service will undergo the next phase of growth. As a result, along with 5G, fintech blockchain adoption is driving new creative CEO opportunities in IoT and supply chain management.

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