The global financial industry has been attempting to experiment and take advantage of blockchain technology. The primary intent of such institutions is to mimic the existing currency transactions over the blockchain. Though this practice gives rise to scope for better productivity and efficiency of a blockchain solution, complete adoption of the blockchain ecosystem in traditional financing is still in question.
Blockchain offers an opportunity to reshape the proceedings and call into question the traditional practices in the present financial industry. Furthermore, with its nature of transparency and immutability, it can level up collective finance practices.
Here we will talk about provenance blockchain and see whether it can lead to mortgage and consumer finance. However, we advise you to take blockchain training to gain an in-depth understanding of blockchain and its applications.
Table of contents
- Understanding the core meaning of blockchain
- Understanding provenance blockchain
- Will it be the blockchain winner for mortgage and consumer finance?
- What advantages will provenance blockchain bring to Financial services
- Settlement and clearance frameworks
- Safety and security
- Credit and mortgage
- Trading and financing
- Quick customer KYC and prevention from frauds
- Closing Thoughts
Understanding the core meaning of blockchain
A blockchain platform is basically a shared ledger that stores information in the form of blocks. Further, these blocks connect with each other in chronological order of records known as chains. The addition of new blocks within the network needs confirmation from all the members of the network. In addition to this, each block has a hash value, a complex equation that needs to be solved.
The process of computing complex equations for verification is known as block mining. Further, the miners who solve the equations early get rewards in the form of valuable cryptocurrencies. A miner solves the block then member nodes on the network confirm the validity of the transaction independently. Further, after completion, a new block attaches itself to the blockchain ledger.
Blockchain works on distributed ledger technology which offers multiple advantages over centralized ledgers. Some of them involve immutability, reliability, security, privacy, transparency, and efficiency. Our current Financial institutions work on a centralized ledger. Hence the involvement of blockchain technology in financial proceedings can disrupt the entire industry.
Understanding provenance blockchain
Provenance blockchain is a type of public blockchain network which is used explicitly for supporting financial services. Further, it provides a reliable ledger, exchange over various financial markets and assets, and a quick registry.
Provenance blockchain allows institutions to quickly collate data along with open-source information aside from verifying the information. Provenance has all the features of blockchain technology, including the immutability of data ledger. Further, anyone can check the credibility of transaction information running over the provenance platform.
Provenance blockchain has been developing its system and features intending to transform financial services for the better.
Will it be the blockchain winner for mortgage and consumer finance?
If we consider the blockchain marketplace, provenance has remarkable competitive benefits. On all the other blockchain platforms that offer financial services, the transaction fee is rising, which is not convenient for users. Hence provenance is working towards providing reasonable prices for transactions over its network. The blockchain expert says that users can operate transactions at one-fourth of the cost of other significant financial blockchain networks with provenance.
This network has a successful ecosystem of its original launch version of 2018. A broad spectrum of financial institutions and organizations are eagerly waiting to take on provenance networks with different finance verticals. This may involve trading and financing, age landing, payments, loan origination banking, and security exchanges.
The upcoming version of decentralized provenance will replace the previous permissioned provenance network of 2018.
What advantages will provenance blockchain bring to financial services?
With its decentralization application, blockchain technology brings a massive opportunity for upgrading the banking industry. Further, this innovation can affect the next mortgage and financial services that the existing banking system provides:
With the establishment of a decentralization system for transactions and payments, Financial institutions can offer quick payment within the low fees.
Settlement and clearance frameworks
Shared ledgers can exceptionally decrease operational expenses. Hence bringing us closer to timely exchanges between different financial institutions.
ICOs or initial coin offerings are collaborating with the latest model of financing. Further, this practice opens access to capital from conventional fundraising firms and services.
Safety and security
It tokenizes the conventional security systems like bonds, stocks, and other alternative assets.
For this, blockchain technology places such financial products on a public blockchain to bring more efficiency and interoperability among capital markets.
Credit and mortgage
This technology completely removes the requirement of intermediaries in the process of mortgage lending. This way, people can easily access the credit industry and borrow desired money at lower interest rates. The reason for the lower interest rate would be the robust security that blockchain provides.
Trading and financing
It replaces the cluster of heavy paper bills regarding the lending process in the trade and finance business. In addition to this, it also offers a secured, transparent and trustworthy ecosystem among trading partners across the globe.
Quick customer KYC and prevention from frauds
We know that blockchain technology stores the information of transactions and customers over decentralized blocks. Hence there is no doubt that it puts such sensitive data in a safer place and efficiently performs timely shares between financial institutions.
These latest innovations need to wait for a significant period to disrupt the financial industry. Moreover, blockchain still needs further testing and trials. Also, in comparison to the centralized ecosystem, decentralization is still far away from mass adoption. However, we cannot deny that blockchain services like provenance are all set to bring change.
Moreover, die-hard enthusiasts of blockchain and cryptocurrency are showing interest in supporting the replacement of traditional banking systems altogether.
To know more about the subject, join the BLOCKCHAIN COUNCIL. Here, you can enroll in multiple blockchain-based certification programs to better up your knowledge.