TechInAfrica – The blockchain technology is growing rapidly in the banking and finance industries in some parts of countries in the world. It promises secure, transparent, seamless, reliable, and convenient transactions to users. Even though it’s relatively new, the adoption of the technology seems to be promising in major commercial banks.
Recently, the SA Reserve Bank has released a project called Project Kholkha report, revealing positive results based on its trial purposed in settling high volume of payment using the blockchain technology.
Due to the significant growth of the blockchain technology, massive investments have increased into the field. Banks are starting to seek more possible ways to implement the technology to the real-world needs. Not only does it have the potential to be adopted in the banking sector, but also in other industries as well, including in many key areas of the finance sector.
In trade finance, the blockchain technology changes banks’ positions in the ecosystems. Instead of being a middleman that connects sellers and buyers, the banks could provide all participants with a secure platform.
In the property business, the blockchain could be adopted to reduce the demand of the paper-based documents. Additionally, it could also optimize the processes of property selling-buying as we will be able to create the immutable property record.
In order to apply the blockchain technology that’s positively impactful in the financial industry, at least there are four main areas should be addressed;
- How to create standards that are applicable to all banks
- How to scale up the blockchain transactional network
- How to create regulations that can address the blockchain networks and customer’s security
- How to make the blockchain network linked up with the back-end system
The main task of the financial industry is addressing these challenges and it will need support and guidance from the Central Bank as well as collaboration in the industry. Despite the challenges, the blockchain technology surely has a promising future in the financial sector.