Banks are recognised for performing a significant role in financial industries. Maximum cash of any country flows through banks but recent years were remarkably unfavourable for banks. Banks fronted many issues due to the due diligence of KYC and AML Compliance programs. They haven’t discovered any traditional process of competing for these challenges. Consumer fraud is rising and costing a tremendous amount to banks. Although many technical innovations are assisting banks and mitigating or eliminating their financial problems.
Roadblocks faced by Banks:
Traditional banking and financial institutions suffered many challenges due to the lack of KYC and AML software for decades. Fintech is the solution for many banking dilemmas but most banks don’t comply with these solutions as they deem these solutions expensive. But FinTech solutions save a lot by fraud detection and cyberattack prevention. Now banking technology is advanced another step to obstruct many crimes and emerging rapidly. In a few years, financial industries will endure a sea of change due to blockchain technology. Blockchain fits to provide many solutions to deter fraud than traditional banking. In research published by TEKsystems, They reported 99% of firms are in interest or already practising Blockchain Technology. Fintech is all agog about this blockchain industry and they believe with the emergence of blockchain industry they can move one step further in FinTech technology. Banks are already practising top AML software for banks as their part to combat money laundering. Blockchain is already growing rapidly as financial biggies such as Visa and ING are already paying attention to it.
Which Dilemmas Banks are Confronting:
When we come to this question there are still numerous obstacles banks and financial sector need to intimate including payment clearing processes, currency options and fraud detection. FinTech is already providing many solutions to combat banking problems but still, there is a chasm that can be filled by using blockchain. But blockchain solutions are still not executed completely nobody grasps what results will it provide to financial institutions or banking sector. Dilemmas confronted by banks include Efficient payment clearing processes, Fraud prevention and limited number of currency options. FinTech is providing solutions and influencing banks by taking three measures: New Customer Generation by using modern techniques and marketing standards FinTech is generating more customers for financial sectors than before, Making more profits by detecting fraud and combating money laundering and FinTech is providing tech improvements by merging tech with finance. Investment in the blockchain is rising as it promises many advantages.
1- Quicker Transactions
2- Efficient Approval System
3- Increased Digital Payment Options
4- Reduced Transaction Costs
5- No More Fraud
6- Transparency
Quicker Transactions: Ordinary Financial Transactions devour more time due to third party involvement. Third parties provide a gateway to receive righteous payments. It demands time due to many inefficient security checks and exchange of messages. Blockchain Diminish extended time frame. It can perform transactions in seconds. Efficient Approval System: Traditional banking go through clearinghouses it takes a minimum of 3 days. Blockchains provide a more efficient and reliable way by the help of innovations such as Know Your Transactions (KYT) and Know Your Customer (KYC), by the cooperation of these, a financial institution can prevent fraud and crime in seconds without delaying actual transactions. Increased Digital Payment Options: With the help of technology and digital payments finance industry can be changed over the globe. Blockchain provides more cryptocurrencies through which customers can pay digitally without any obstacle. In the early days there was only one cryptocurrency now there are multiple through which consumer can make their digital payments i.e. IVY. Reduced transaction Costs: Financial Transactions involved third parties to verify transactions and global transaction flow through central banks of countries and then local banks that cost $25 either to merchant or enterprise. Blockchain can reduce this cost to a few cents only. Similarly, Blockchain offers great transparency and obvious fraud detection techniques with the help of advance IVY network.