Increased focus on cost reduction and operational efficiency is no longer just a notion associated with large manufacturing corporations. The rise of private peer-to-peer technology lenders continues to put pressure on the profitability of the conventional banking system. One possible solution is technological advancement that would allow banks to reduce costs and improve upon transactional efficiency in order to remain competitive. Banks around the globe are increasingly evaluating the potential of blockchain as an alternative to many transactional systems currently in place, and many have joined hands with Fintech businesses to redefine their banking services. Most recently, it was touted by the Financial Times that Singapore’s banks have become a hotbed for Fintech, as Standard Chartered and DBS bank embarked on a government-backed partnership to use blockchain – the technology behind the cryptocurrency bitcoin – for trade finance transactions.
Since 2013, many banks and financial institutions across the globe have embarked upon the journey of adopting blockchain to transform or enhance their current product offering. However, the potential of blockchain extends far beyond redefining the banking system, and many tech start-ups have already begun to capitalize on some of the benefits that this technology has to offer. Companies like BitShares, DXMarkets and Secure Assets are using the technology for digital security trading, while Blockai, Artplus, and Bitproof are using it to store proof of ownership for digital content. Similarly, Storj is using blockchain to offer decentralized storage solutions using a network of computers, while ePlug is using it to provide decentralized internet and computing resources to every home and business.
Given the rise in popularity of this technology, Microsoft has recently announced its Blockchain as a Service (BaaS) offering for enterprises to develop, test and deploy blockchain applications. Today, 20 different types of uses of blockchain have been cited by Let’s Talk Payments, a company that specializes in research on the global Fintech sector. How this technology will evolve further, is a mystery yet to be solved.
This is part of our series articles in the International Corporate Finance Report.