How Blockchain technology will impact the banking industry

How Blockchain technology will impact the banking industry
How does blockchain technology change the current banking landscape?
Banks often act as intermediaries in the global economy, managing and coordinating the financial system through their internal ledgers. Because these ledgers are not publicly available for customers to check, they are forced to rely on their often outdated banks and infrastructure.
Blockchain technology has the potential to improve not only the global money market but also the banking industry as a whole by eliminating these middlemen and replacing it with a system that does not need to be based on trust, transparency, and non-trust. is hindered on the border that anyone can access.
Blockchain is capable of creating transactions faster and less costly, increasing capital access, improving data security, enforcing agreements without relying on trust through smart contracts. and make compliance easier as well as many other advantages.
Also, thanks to the innovative nature of blockchain, interactions between new underlying financial blocks could potentially lead to completely new types of financial services.
What are the main benefits of blockchain for banking and finance?
Security: Blockchain-based architecture eliminates one point of damage and reduces the need to provide data to intermediaries.
Transparency: Blockchain standardizes shared processes and creates a single shared truth source for all network participants.
Confidence:  Transparent ledgers make it easier for parties to cooperate and reach agreement.
Programming capabilities: Blockchain enables the automation of reliable business processes through creation and execution of smart contracts.
Privacy: Blockchain-enabled security technologies allow for selective data sharing between businesses.
Performance: Networks are designed to maintain a large number of transactions while supporting interoperability between different chains, creating a chain of block chains that are interconnected.
Payment and receive money quickly thanks to blockchain
Sending money in the current banking system can be a long process and can incur different costs for both banks and customers and require additional verification and administration. In the era of instant connectivity, the banking system has so far failed to keep up with the development of technology.
Blockchain technology provides a faster payment method with lower fees and can provide the service at any time and has no geographical barriers and still ensures a level of security as the banking system. row.
Call capital directly on the blockchain
In the past, entrepreneurs seeking to raise capital had to rely on external financiers, such as angel investors, venture capitalists or banks. This process can be rigorous and requires lengthy negotiations on pricing, equity splits, company strategies and more.
Events Initial Coin Offerings (ICO) (Mobilizing the original) and the Initial Exchange Offerings (IEO) bring new projects the opportunity to raise capital without having to banks and financial institutions other. Backed by blockchains, ICOs allow companies to sell tokens in return for capital with the assumption that tokens will generate profits for investors. Traditionally, banks have collected huge fees to facilitate business securitization and Initial Public Offerings (IPOs) , but blockchain technology can help avoid those fees.
It is important to note that although ICOs have the potential to make fundraising more democratic, they also have some problems. The establishment of an ICO allowed projects to raise significant capital without any formal or specific requirements for them to keep their promises. The ICO market is largely unregulated, and therefore, brings significant financial risk to potential investors.
Token (turn into digital assets) assets on the blockchain
Buying and selling securities and other assets, such as stocks, bonds, commodities, currencies and derivative instruments requires complex coordination between banks, brokers, and liquidity agencies. clearing and exchanges. This process is not only efficient but also accurate. The higher the complexity, the greater the processing time and costs.
Blockchain technology simplifies this process by providing a technology base layer that enables the conversion of all types of assets into digital assets (tokenization). Since most financial assets are purchased and sold through online brokers, tokenizing them on the blockchain seems like a convenient solution for all involved.
A number of innovative blockchain companies are studying tokenization of real-world assets, such as real estate, art and goods. This will turn the ownership of valuable real-world assets into a cheap and convenient process. It will also open new avenues for investors with limited capital by allowing them to buy ownership of a part of expensive assets - investment products that they may not have previously been able to afford.
Lending money through blockchain
Banks and other lenders have monopolized the lending industry, which allows them to provide loans with relatively high interest rates, and limit the number of people who rely on credit scores. This makes borrowing money long and expensive. While banks have the advantage, the economy depends on banks for the capital needed to own high-cost items, such as cars and houses.
Blockchain technology allows anyone to participate in a new type of loan ecosystem, which is part of a movement commonly known as Decentralized Finance (DeFi) . To create a more accessible financial system, DeFi aims to bring all financial applications to the forefront of blockchains.  
Blockchain allows peer-to-peer lending to enable users to borrow and lend in a simple, secure and inexpensive manner without arbitrary restrictions. As the lending market becomes more competitive, banks will also be forced to offer better terms to their customers.
Blockchain's impact on global trade finance
Participation in international trade has major inconveniences because participants must be aware of a large number of international rules and regulations imposed on importers and exporters. Tracking goods and transporting them through stages still requires manual procedures and handwritten documents and ledgers.
Blockchain technology allows commercial financial participants to provide a higher level of transparency through a shared ledger capable of accurately tracking the movements of goods around the globe. By simplifying and rationalizing the complex world of commercial finance, blockchain technology can save importers, exporters and businesses a significant time and money savings.
Safer agreements thanks to smart contracts
Contracts exist to protect people and businesses when they enter into agreements, but they also pay a lot to pay for that protection. Due to the complexity of the contract, making a contract takes a lot of manual work from legal experts.
Smart contracts allow automation of agreements through a definite and anti-tampering code operating on the blockchain. Money is kept safe in escrow and only released when certain conditions of the contract are met.
Smart contracts allow parties to not need to trust each other to reach an agreement, this helps minimize the risks of financial agreements and the ability of the parties to dispute in court.
Data ensures integrity and security thanks to blockchain
Sharing data with reliable intermediaries always creates the risk of data breaches. In addition, many financial institutions still use paper-based methods, significantly increasing record keeping costs.
Blockchain technologies help create logical processes, capable of automating data verification and reporting, digitizing KYC (identity verification) / AML (anti-money laundering) and historical data transaction, and allow instant verification of financial documents. This helps reduce operational risks, fraud risks and reduce data processing costs for financial institutions.
The banking and finance industry is one of the main industries that will be affected by blockchain. Blockchain will have many potential use cases, from real-time transactions to asset tokenization, lending, making international trade process more convenient, tighter digital agreements. and more.
It seems that all technological and legal barriers will soon be resolved in order to fully exploit the potential of this new financial infrastructure.
A transparent, transparent, trust-based, financial-based banking and financial system is unlikely to help create a more open and connected economy.
If you need to refer to some nice website interfaces for your Blockchain project, or need to support any problems with Blockchain technology, you can contact  E-GROUPS Vietnam directly for a free consultation.
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