Technology has no doubt changed the financial services industry in so many ways but some experts believe that blockchain will change it in more unbelievable ways.
Experts have argued that artificial intelligence will ride on blockchain to offer the world much more effective banking services with little or no high charges. Hard to believe? Well, only time will tell!
Globally, businesses are beginning to witness rapid displacement, not just disruption and in worse cases, going into outright extinction due to rapid change in technology. The financial services industry, especially, is beginning to feel the heat from this and many other disruptive technologies.
Key areas of the financial services that are most likely to be affected by blockchain include transfers, payment and lending. We have seen different start-ups such as OneFi, Inspire, Upstart, and Funding Circle, playing critical roles in peer- to -peer lending and services to individuals.
Lending had always been a traditional banking function. What this means is that, individuals do not need to go to banks to seek for certain kinds of loans anymore.
We know how strenuous it has always been to obtain loans from the financial service providers. Aside from the high-interest rates, the conditions and requirements for individuals and businesses are usually high.
So these platforms are providing alternative decentralised lending solutions to individuals and small businesses, using the innovative blockchain technology.
This innovation has increased the quest for peer-to-peer lending services in developed countries such South Korea, US and even Russia, which has led traditional banks to come up with new survival strategies with some throwing their weight behind crypto currencies.
One of the key benefits promoters of blockchain claim is that it’ll eliminate the monopolistic power of financial service providers. Also, that transactions are usually safer, transparent, decentralised and that is going to be a fair game for everyone.
Blockchain uses strong predictive algorithms that can detect any form of fraud. What this means is that instead of having a centralised authority just like the Central Bank of Nigeria, it makes use of a network of computers to approve transactions, otherwise known as “blocks.”
These blocks are linked to the “chain” of computer codes. The security of blockchain technology is, however, built around cryptography, making it more difficult to manipulate but hackers are not resting on finding back doors.
Beaming the spotlight down to Nigeria and West Africa; do we have any innovation built on blockchain technology yet? The closest we have seen so far is what VoguePay, a leading online payment start-up, has done.
It recently launched a multi-currency payment platform to enable businesses to — Finish Reading on the Punch