How Automation And Blockchain Are Transforming Finance
If you were asked to name two of the most innovative emerging technologies of today, chances are, blockchain and automation would be among the top choices.
These revolutionary technologies are affecting every industry from finance right down to manufacturing and even media companies.
Just this week, Time Magazine made history by announcing it had altered its subscription payment model to accept Bitcoin payments paving the way for other news and media outlets to follow suit.
However, just what is automation and blockchain, and how exactly have these technologies disrupted the financial industry?
Let’s dive deep.
What is automation?
Techopedia.com defines automation as:
“…the creation and application of technologies to produce and deliver goods and services with minimal human intervention.”
The widespread implementation of automation techniques across the financial world has led to an improvement in the efficiency of processes, system reliability, and the overall speed of transactions.
Some experts are even saying we’re living through the Age of Automation.
What is blockchain?
According to Euromoney.com, blockchain is:
“…a ledger of transactions that is duplicated and distributed across an entire network of computer systems.”
The way this system is set up allows for information to be recorded in a manner that makes it impossible and difficult to hack, cheat or change.
These properties lend themselves well in the financial sphere and are the reason this new technology has been widely heralded across the industry.
Financial areas that automation and blockchain are transforming
Despite its conservative nature, the financial industry has welcomed automation as a way of streamlining labor-intensive processes.
Robotic process automation (RPA) is software that many financial service providers have adopted and integrated into their websites and various digital platforms. This software can be programmed to carry out routine tasks typically done by human beings. Think chatbots.
From handling back-office tasks like processing customer inquiries, responding to clients, and facilitating transactions more quickly RBA has proved itself extremely useful in reducing operational costs while improving the end-user experience.
Where blockchain is concerned, it has enabled digital currencies to exist and flourish.
As the underlying technology behind cryptocurrencies like Bitcoin and Ethereum, blockchain has given room for trust to be built between traders and investors.
With billions of dollars in remittances — $508 billion in 2020 — flowing through banks each year, finding cheaper and less cumbersome means of moving money has become a top priority for many financial institutions.
Across numerous banks in the U.S., blockchain-based transfers are now the order of the day with said transactions saving banks considerable amounts of time and money.
Banks are also relying on blockchain’s immutable ledgers when facilitating title transfers. Because ledgers can track ownership and are difficult to tamper with, they provide security.
Another area that blockchain technology is greatly assisting with is the issue of fraud.
As a technology, blockchain is almost hacker-proof and common threats such as DDOS attacks are virtually unheard of.
Blockchain-enabled digital IDs are also being used to identify clients providing them with secure gateways to carry out their transactions.
To read more about how blockchain technology is disrupting the financial space check out my blog titled The Rapid Rise of Cryptocurrency And What It Means For Traditional Investing