Fintech industry analysts say the blockchain technology market is expected to rise from $1.2 billion to over $57.5 billion in the space of 2018 to 2025, which is a compound annual growth rate of 69.4%. Midway through this transition, blockchain technology has impacted many industries, and the FinTech industry is just one of them.
As the chart below shows, government, healthcare and media are already established areas for blockchain deployment.
Image Source: Grand View Research
If we look at the usage of blockchain technology in financial institutions, here is how it looked even in 2016:
Intra-Border Payments will be made easier
The blockchain technology, unlike the current fiat system, has no central authority. At the same time, the transactions via this technology are exceptionally secured, thanks to the advanced cryptographic technology. The banks were first to understand the value of this technology and increased their investment in it.
The total amount of annual remittance is around $629 billion, and nearly $529 billion goes to developing nations. The middlemen get a lot of transaction fees, which is the reason the customers are looking for a better solution. Analysts have highlighted numerous examples. Lately, Australian Bank collaborated with Ripple to make cross border payments easier. Wirex is a FinTech company that allows an instant remittance. On top of that, it has also partnered with Visa Debit Card, combining it with a Bitcoin Debit Card, winning more analyst comment.
The share of Digital-Only Banks will keep on rising
It takes a huge capital to establish a bank. Furthermore, one needs to figure out many issues with central banks to open a new bank. Blockchain technology has made it easier for digital-only banks to enter the world of financial markets.
Analysts say the global digital banking market share is above $5 billion, and it will grow as Blockchain technology get more advanced. These banks will compete with traditional banks in the times to come.
Ease in Digital Identity
Unlike registering in each platform as you do in banks, the blockchain technology makes it easier to establish your digital identity. Once you register your account with blockchain, there is no need for you to record your details with each service provider. Your information is globally shared securely.
Trading will become easier
Both buyers and sellers need intermediaries to trade stocks on the market, say analysts. Trading via online platforms will eliminate a lot of needs of the middlemen, which will save some cost, and it will also speed up the settlement process.
Accounting made simpler
The blockchain technology is more than a mere database. It contains an algorithm that makes sure that there is no double-spending or any other flaws in the transactions. The analysts agree that progress in this technology will allow users to customize and validate the transactions, which will make the accounting process more straightforward and secure.
What should you do as a professional in the FinTech Industry?
You now know that the impacts of blockchain technology are growing in the FinTech industry, but what can you do about it? Should you learn nuts and bolts of the blockchain technology? Well, that is not so important, but I would expect you to learn the fundamentals of how blockchain technology works.
Once you are aware of the fundamentals of blockchain technology, you should keep a close eye on its impacts on the FinTech industry. With the knowledge of blockchain technology, you can contribute more to your organization and bring many useful insights to help them in innovations. Industry analysts are the best possible source of insights.