Blockchain Technology is not only set to revolutionize the world but it’s already making inroads into various sectors of a host of industries globally. The financial industry seems to be the frontline for developments of this technological innovation just as it was the case with Bitcoin when it was first rolled out in 2009 which disrupted the financial payment systems of the world and it is something that the likes of GALLACTIC Blockchain, an emerging next generation blockchain platform, continues to do. Many questions have been asked regarding all the possibilities for change and improvement that Blockchain Technology can bring not only through the cryptocurrency realm but through its other technological facets such as the distributed ledger technology, smart contracts, technical standards (e.g. ERC-20), , countless crypto-tokens and applications, and others being developed and already developed. One of the main questions asked, is whether the much hyped enhanced transparency that Blockchain Technology will foster, can help the banking industry? numerous blockchain platforms What really is Blockchain Technology? Blockchain is basically a distributed ledger where encrypted data and records are replicated amongst its participants or nodes and cannot be changed or erased. It provides for a decentralized ecosystem in the form of peer to peer networking where there is no need to rely on a third party intermediary wielding control over the asset rights managed by ‘smart contracts’ (predetermined self-executing programs). This provides a means where complete data of transactions will be shared between participants of a public ledger or for those permissioned on a private ecosystem in almost real-time basis. In other words there is more transparency where Blockchain Technology is used. Blockchain’s Potential Uses In Banking due to Its Transparency This potential for transparency internally and externally can help provide banks the opportunity to replace certain middle- and back-office functions, provide unprecedented cohesion to internal bookkeeping procedures, show an account of consensus with audit trail of transactions that have been cryptographically encoded, create almost real-time settlement and strengthen risk management both ways for the bankers and their clients alike. All these will see cost savings in time and labor requirements, reduced paper work and elimination of repetitive work, reduction of fraud and illegal activities, and decentralization among other things. Some say because of the transparent nature of , it does not need to be regulated, hence there will be tremendous savings in cost from this area also should it become a reality. Banking wise this transparency can basically negate the need for checks and balances that usually take-up important resources and manpower. Which is what big banks like JP Morgan, Citibank, HSBC, Barclays, Banco Santander, Bank of America, Bank of Australia and others are hoping to leverage upon, with their investments and Proof-of-Concept (PoC) initiatives, a variety of projects with such as Ripple, Ethereum, R3, Transfer Wise and a list of other startups to find ways to adopt Blockchain Technology more expediently into their operations. Blockchain Technology various Fintechs Blockchain Technology, Fintechs, and Banks Blockchain based distributed ledgers can be utilized for complex financial assets where no clear central authority exist to regulate, arbitrate and/or mitigate counterparty failure or risk of trade. Therefore, this technology will also benefit, through its potential for greater transparency, banking products like Public & Private Stocks/Bonds, FICC derivatives, Syndicated loans, Factoring, letters of Credit, Corporate Bonds, and Derivatives Margin/Collaterals especially in the transfer of these securities. The amount of applications within and outside the banks will be limited as blockchain transactions hold all relevant information for the successful transfer of related contracts and/or assets. Further Uses of Blockchain Against Crime Some of the other benefits to banking, due to the open and transparent network infrastructure of blockchain, is that trust will not be an issue anymore. Because information is decentralized, all parties with access to the blockchain have complete transparency where any fraudulent activity like a data breach or attempts to corrupt, delete or change information would be noticeable and traceable. Investors and depositors in the near future might also be able to track, through more transparency, how and where their funds are being used by the banks which promotes accountability on the bank’s part. Blockchain in KYC/Identity Uses Blockchain will also permit independent verification of one client by one bank or organization to be accessed by other banks and organizations so there isn’t ‘know your customer’ (KYC) repetition and administration costs for compliance departments would be much reduced. Already across Europe, in early 2018, open banking and the second payment service directive (PSD2) is allowing third parties to have access to customer’s transactional banking details to offer comparison services and new applications for people to manage and transfer their money online. Think how much more transformation and advancement there will be in this area when Blockchain comes into the picture? Apart from all the above benefits to the banking industry, as all money can be easily traced to its rightful owner by Blockchain and its applications, which afford transparency in payments of goods and services, there will certainly be accelerated adoption of this technology by the banking industry in the days to come. Notable Global Blockchain Technology Advances in 2018 Ethereum’s price traded on 8/28/18, just above the $290 level and nearly tested the $300 resistance against the . There has been a slow and steady rise of in August, 2018 and experts say it should rise above the $300 level sometime soon this year. US Dollar ETH against the US Dollar Finterra — A multi-national start-up FinTech company is currently providing ‘ ’. Finterra’s has been developed with state-of-the art multichain architecture — built with . GALLACTIC is an open source Blockchain platform, with a user-friendly development environment, interoperability initiative and an ecosystem of permissioned and public chains. GALLACTIC Blockchain was established in October 2017 and to date has a userbase of 700,000 attracted by multiple use cases built upon its platform. The GALLACTIC crowdsale starts 1st November 2018 and ends 30th January 2019. Social Solutions for Blockchain GALLACTIC Blockchain Platform next-generation blockchain technology Ripple — Japan Bank Consortium to release in Autumn 2018, a ground breaking smartphone application called ‘ ’ which is powered by Ripple’s Blockchain Technology that enables clients of the bank consortium to settle transactions instantly 24/7. Japan has been slow over the years in adopting mobile payment technology as compared to other Asian countries but 2018 will prove to be a to digital payment applications. MoneyTap major shift Writer: Chris Yip
