The Future of Blockchain in Canadian Banking. Canadian banks are on a rash to patent the future of finance. The big banks have been making significant steps forward when it comes to revolutionizing the Canadian financial sector. Some of the milestones achieved include:
- Giving updates of individual bank accounts in virtual reality
- Building credit scores on Blockchain
- Using facial technology to scan would-be recipients of payment receipts
Canadian banking is becoming more and more dependent on technology. These ideas have been envisioned in public patents filings with banks such as Toronto-Dominion Bank upgrading from filing around one patent application a year to about 40 applications annually. Blockchain has been regarded as a revolutionary innovation in the banking industry. Some estimates show that 10% of Canadian GDP will be stored on Blockchain by 2025.
Blockchain has revolutionized financial infrastructure because its features are safe, fast, and cost-effective. The fact that it leverages on millions of PCs on the internet to save data rather than sending all transaction information to a central server makes blockchain the future of finance.
The Future of Blockchain
Estimates show that 66% of banks worldwide will apply Blockchain technology including the Canadian big banks. The resolve will be using Blockchain technology to develop mobile payment services. There are at least a billion people in the world who have access to phones and who use these phones to make transactions. Canada is one of the most digitally connected countries in the world. Thus Blockchain technology will bring a lot of practical benefits like:
- Increasing mobile banking security
- Eliminating errors and fraud
- Speeding up payments
- Cutting costs
The Royal Bank of Canada has reportedly began testing blockchain payments and many more world’s famous banks are creating infrastructure based on blockchain.
There are other ways in which blockchain will influence the future of Canadian big banks. How?
- A low-cost competitor enjoys cost advantage with a high-cost competitor in the market as stated by the economic theory. The future adoption of blockchain technology by other banks beside Canadian banks will create a market competition that will pressure all banks to pass on the initial profit made back to individuals
- Blockchain technology has been utilized in digital currencies such as bitcoin and in other financial innovations. The element of smart contract used in blockchain will be used in other areas such as provenance of documents, ownership rights, digital or physical assets all in a bid to stop fraud.
- There will be a slice in the fees and commissions charged by big banks. The blockchain is simply defined as a shared ledger of transactions. The kind of shared and distributed technology reduces the time and money associated with cross-border banking transactions. However, this will come at the cost of loss of revenue.
Despite, The Canadian central bank decision against blockchain to provide the underlying infrastructure for the country’s interbank payment system, blockchain technology has gained more popularity and confidence in transforming the Canadian banking system. Banks such as RBC have been on the frontline of implementing blockchain technology. More big banks are expected to follow suit. The future of blockchain technology in the banking industry has a lot of potential yet to be exploited.
Trackbacks/Pingbacks