Banks are lately on the path to explore blockchain, technology that is making waves in various industries. Despite the projection of its market value skyrocketing from $4.9 Billion in 2021 to an impressive $67.4 Billion by 2026, banks are proceeding with caution. Banks are being careful because there are not many ways to use blockchain in banking yet. Apart from this, related rules are in the way. But, they are slowly trying it out on a small scale. Here, we will talk about how blockchain is becoming important in banking.

In acknowledging the benefits of blockchain in banking, it is crucial to first understand the prevailing issues in the current banking system. Centuries of existence have rendered traditional banking somewhat stagnant, marked by sluggish adaptation, reliance on paperwork, security vulnerabilities and time-consuming processes.

The need for change in the banking sector is palpable. Let us now take a brief look at how blockchain helps banks. It is making a big difference in things like paying money, making it faster and without extra fees. Cryptocurrencies like Ether and Bitcoin, built on public blockchains, facilitate real-time, fee-free transactions. The technology also simultaneously helps with settling and clearing transactions faster and with more transparency.

Blockchain is changing how stocks and loans work. It is making a digital database that does not need lots of middlemen. Things with it are faster and simpler.

In addressing customer Know Your Customer (KYC) procedures, blockchain stores customer information securely, significantly reducing the time and costs associated with verification processes. Blockchain is not used a lot in banking yet, but it is showing its potential in real situations. Even though the adoption is a slow process, it looks like blockchain could change how banking works in the future.