Blockchain applications in the financial sector
In the financial industry, blockchain technologies are being created more and more.
Banks were originally sceptical of blockchain, but the finance industry is now embracing blockchain ventures all over the world. We’ll go into a few of these blockchain implementations in this essay.
In 2016, SWIFT (Society for Worldwide Interbank Financial Telecommunication), the organisation in charge of global payment traffic, released a report on distributed ledger technology (DLT), of which blockchain is an example.
The result was that new distributed ledger technologies (DLTs) are not yet mature enough for use in the financial field. SWIFT is working with distributed ledger technologies, such as Ethereum. Hyperledger, a Linux Foundation initiative that implements open source blockchain technologies for the market, is also a co-founder of the company.
Since it contains classified details, finance companies and their clients find absolute disclosure unappealing. They see a lot of potential in a permissioned blockchain. Only allowed participants have access, and not every participant has access to all information: user rights decide who has access to which data. According to SWIFT, current systems are still severely lacking in this region.
For foreign and interbank transfers, the blockchain provides several benefits. After all, these are mostly high-risk purchases. Currently, most of these are reviewed manually. As a result of the blockchain’s expansion, foreign transfers can be processed more quickly and reliably, at a reduced cost, and with a lower chance of fraud.
In September, Mastercard and R3 agreed to collaborate on the creation of a distributed ledger for multinational business-to-business transactions. While Mastercard is better known for its credit cards, it also has a presence in the payment services industry thanks to its acquisitions of Nets and Transfast.
SWIFT is based on Corda as well. The Global Payments Initiative was launched two years ago with the aim of making foreign payments quicker and safer. In the meantime, SWIFT has connected the GPI to the Corda platform, allowing DLT-based trading platforms to bind to the network.
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