Post Covid-19 will see big changes in the world, the way in which people think, live and work. The pandemic created a devastating situation, took human lives and made an uncertain and unpredictable future. Economy is down and industries are struggling to sustain in the market. Finance sector also hit hard and now looking for rapid changes in the near future.
Blockchain technology is a buzzword in the society for a long time and always comes along with the talks related with cryptocurrencies like Bitcoin and Etherium. What is Blockchain technology?
Blockchain technology is a digital ledger that stores transactional records of public in the form of blocks in several databases, termed as chain and connected to a network through peer-to-peer nodes. It is a decentralized system with a digital asset. Each block inside the blockchain is unique and cannot be manipulated or hacked. Since it is a decentralized system, there is no role for any third parties. About 24% of the world population is familiar with Blockchain technology.
In finance, blockchain can be used in transactions, where the third parties will be avoided and there will be only debtor and creditor. This system avoids present day banking systems and helps in easy transfer of money from any part of the world. Fintech is a booming sector and has recorded growth in the recent years. Goldman Sachs estimates that worldwide Fintech will be worth $4.7 trillion. More investments are now coming to this sector and it was reported that 88% of banking organizations in the world fear losing revenue to fintech companies in areas such as payments, money transfers and personal loans in the future.
Blockchain in Fintech make the system more transparent, immutable and fast. During the COVID pandemic, the use of digital transactions and fin tech increased across the world. Central banks and International Authorities like WHO advised people to go for contactless payments to avoid the spread of the epidemic. Post COVID also seems to be an era of digital economy and the use of digital services will increase in every sectors of the economy. Fintech companies has a good potential in the future and blockchain will be a turning point in the banking operations.
The scope and application of blockchain is not just limited to the financial sector. It can become the next Internet, where two people can transfer information and get information without the aid of any third parties. As I already mentioned the system of blockchain cannot be manipulated and if anyone have to manipulate it, then he/ she has to change the entire block related with it. These features make the Blockchain technology acceptable to the Fintech in the coming years.
The financial assets will be secure in blocks and everyone get the access to it, because the entire system is decentralized. Blockchain paves the way for the development of cryptocurrencies and in future these currencies will be integral part of the financial and banking sector. World is now becoming more digital and in the coming years digital services become necessities. At that time, Fintech and Blockchain will revolutionize the transaction network in the world.
