According to a recent survey undertaken by Accenture, 9 in 10 executives said their bank is currently exploring the use of blockchain.
Barely a day goes by without a new announcement about how banks are seeking to use blockchain technology to transform large parts of their business.
By combining shared databases and cryptography, blockchain technology allows multiple groups including customers and banking institutes, to have simultaneous access to a constantly updated digital ledger that cannot be altered.
How banks are exploring blockchains benefits
Central banks across the world are exploring the potential for moving large parts of their payment systems on to blockchain technology or even using it to launch digital currencies.
This is partly a response to the issues that cryptocurrencies such as bitcoin could pose to larger banking institutes’ control of money. It also shows clearly that central bankers are currently becoming more aware of the potential benefits of using this new technology to enhance systems that process payments.
Banks have been working for many years to set up a shared digital utility to record customers’ identities and keep them updated. In the past they have struggled with the demands of liability and also the decision as to who retains liability on transactions.
It could be said that blockchain could offer a solution because of its total protection and the ability it has to share an updated record that can be adjusted by many parties. So, we’re getting there!
Now that we’ve seen how blockchain can offer banks new solutions to age-old issues, let’s take a look below at which of the banking giants are experimenting with Blockchain technology.
Who is using Blockchain?
In April, Spanish-based international bank Santander announced the launch of its Ripple-powered, blockchain-based payment network called One Pay FX, becoming the world’s first bank to do so.
The new service, known as ‘Santander One Pay FX’, makes it possible for customers to complete international transfers on the same day in many cases or by the next day. The service also shows them the exact amount that will be received in the destination currency before they make the transfer.
According to the launch release, Santander is looking to add many more features in the coming months, including offering instant international payments, allowing customers to make much faster and secure international payments.
The below quote from Ana Botín, Executive Chairman of Banco Santander explains how blockchain quickly and effectively aids international money transfers, which will lead to a higher level of customer experience, along with the level of trust that is expected from a banking giant such as Santander. I like the way she sums it up…
“One Pay FX uses blockchain-based technology to provide a fast, simple and secure way to transfer money internationally – offering value, transparency, and the trust and service customers expect from a bank like Santander.
Blockchain is here and the benefits for the banking sector are just unwrapping.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.