Blockchain Banking Changing Landscape of Banking Sector
A blockchain technology is an anonymous online ledger that uses a data structure to simplify the way we transact. Bitcoin is the popular example of the blockchain technology . Its allow the user to manipulate the ledger in a secure way without the help of a third party. Now blockchain technology currently started using in the banking sector .
A bank’s ledger is connected to a centralized network. However, a blockchain is anonymous, protecting the identities of the users. This makes blockchain a more secure way to carry out transactions. The upshot is that the need for payment processors, custodians, and reconciliation bodies is eliminated.
Blockchain technology is being used to protect sensitive records and to authenticate the identity of a user. Keyless Security Infrastructure (KSI) stores data hashes on blockchains and runs a hashing algorithm for their verification. Public Key Infrastructure (PKI), an encryption approach that is particularly vulnerable to man-in-the-middle and DDoS attacks, is therefore deleted out of the equation.
Any data manipulation can be easily spotted as the original hash is available on other nodes linked to the system, enabling banks to go beyond asymmetric encryption and caching in public keys. All major banks are experimenting with blockchain as they can use it for money transfers, record keeping, and other back-end functions.
The blockchain application replicates the paper-intensive international trade finance process as an electronic decentralised ledger, that gives all the participating entities, including banks, the ability to access a single source of information.
IBM Announces Major Blockchain Solution to Speed Global Payments
On IBM Official Website a new blockchain banking solution that will help financial institutions address the processes of universal cross-border payments, designed to reduce the settlement time and lower the cost of completing global payments for businesses and consumers. Using IBM Blockchain, and in collaboration with technology partners Stellar.org and KlickEx Group, the solution is intended to improve the speed in which banks both clear and settle payment transactions on a single network in near real time.
The banking network includes “12 currency corridors” that encompass Australia and New Zealand, as well as smaller countries like Fiji and Tonga. It will reportedly process up to 60 percent of all cross-border payments in the South Pacific’s retail foreign exchange corridors by early next year.