Scamming is one of the biggest problems in online banking. It’s difficult to trace a bank that has not been a part of this scam in the past. Giant banking corporations like J.P. Morgan, Barclays, Deutsche Bank, etc. have adopted the technology to keep hackers far from the bay.
The main purpose of introducing the technology in online banking is to secure the online payments.
While ordinary payment processing servers may require third-party access to generate an OTP. Whereas, a cryptocurrency barely needs one such assured secure payment gateway site–. It does not require making online transactions that barely need a third party to involve in the transaction processing. This is the basic fundamental on which blockchain technology works for online banking.
You’ll find these basic information on bitcoin investing sites like https://bitcoin-buyer.app but to know the technology with a broader perspective you have to dig in further.
First, let’s begin with the advantages of using Blockchain technology in online banking.
Benefits unlocked by the technology in online banking:
- Verifies and validates a transaction and records it
- Does not involve a third party server to make a transaction
- Involves the users only who’re associated with the transaction
In Fintech– i.e. Financial technology security is one of the major concerns. It’s not a new instance that multiple times a certain amount has been debited from the user’s account and the transaction failed. In the United States it was a common problem earlier. But the introduction of blockchain has completely eliminated those problems from the root. The introduction of this technology has made online banking transactions much simple and safer now.
Let’s find out how:
Simplicity and transparency in cross border payment
Most of the commercial and centralized banks all over the world adopted blockchain for bank-related transfers. The system assists those banking corporations to provide their own digital currencies. Those currencies are feasible for cross-border payments. That helps the user/users of the technology to make online transactions without the involvement of any third-party payment gateway site. That enhances security and safety factors in online banking.
The banking blockchain technology turned cross-border transactions easier and less expensive than the protocol followed in traditional international transactions. While the traditional transactions involve remittance costs sometimes going up to 5-20%. In the case of blockchain banking technology, the remittance cost is not more than 2-3% of the total amount may be. That speeds ups international financial transfers.
Stock exchange and share trading turned ‘easy peasy lemon squeezy’
Buying and selling of stocks and shares turned incredibly easier with the usage of banking blockchain technology. The traditional method of stock trading is quite a cranky deal. It takes 2-3 business days or sometimes more than a week for processing a stock exchange. Whereas blockchain made it easier with:
- Initiating the trade either from a buyer or a seller
- The transaction must match with the other party before trading
- Once the transaction is sent to the stock exchange by a broker it takes a minimum time for the Central Counterparty Clearing house to record the transferred transaction.
- The transaction is sent back to the Agent who initiated the trade by updating the list of the shareholder
That makes online trade and stock-related transactions easier and faster. It’s quite effective in performing smaller transactions quickly between the two groups of traders. Only the final transactions are recorded in the blockchain without any third party’s involvement.
That sounds much safer and secure than traditional forms of online trading.
Who wants to be the Wolf of Wall Street now?
Financial trading and online payments is easier now
Blockchain has a pivotal role in trading and finance nowadays. Running financial activities, related to commerce and international trade always involve multiple parties. The technology involves a distributed ledger system for connecting with multiple users. That reduces the effort of paperwork, preparing the bills of lading, etc.
While it comes to pay your utility bills, electricity bills, and restaurant bills, bitcoin is a far better and reliable currency. Your dependency on one such digital currency makes online transactions much easier and quicker. In some countries, bitcoin receives the importance of currency value and it can be withdrawn from ATMs quite easily. In countries like New York and London, the traders and merchants are much likely to take payments in cryptocurrencies like bitcoins too. That makes the online banking and payment withdrawal process much easier.
However, there are plenty of other areas as well, where cryptocurrency has revolutionized the general proceedings related to online payment without the involvement of hard currency notes.