Blockchain technology allows data to be stored globally on thousands of servers – while letting anyone on the network see everyone else’s entries in near real-time. That makes it difficult for one user to realize control of, or game, the network.
Capital Markets
Capital markets pair of issuers with demand for capital, to investors with corresponding risk and return profiles.
Whether the issuers be entrepreneurs, startups or large organizations, the process of raising capital can be challenging. Firms face increasingly stringent regulations, longer times to get to market, volatility from interest rates and liquidity risk. Particularly in emerging markets, they must navigate the lack of rigorous monitoring, thorough regulation and sufficient market infrastructure for issuing, settlement, clearing, and trading.
Blockchain offers multiple benefits for several capital market use cases:
Asset Management
Venture capital firms, private equity firms, land funds, and specialty markets face demands to enhance liability risk management, adapt more dynamic decision-making structures, and address the increasing complexity of ever-changing regulations.
Blockchain can effectively streamline asset and stakeholder management. It allows:
Payments and remittances
It takes 2 to 7 days and costs a global average of 6.94% to send $200 between countries. This means that remittances are directly reduced by $48B through fees, intermediaries, and financial institutions. Blockchain can streamline payment and remittance processes, reducing settlement times and significantly reducing costs. It allows:
Banking and Lending
Core banking comprises transaction, loan, mortgage, and payment services. Many of those services depend upon long processes of execution. For example, between information verification, credit scoring, loan processing and distribution of funds— it takes 30 to 60 days for people to secure a mortgage, and 60 to 90 days for small or medium enterprises to secure a business loan. Blockchain can streamline banking and lending services, reducing counterparty risk, and decreasing issuance and settlement times. It allows:
Trade Finance
Trade finance refers to the infrastructure, processes and funding that support international trade supply chains. The industry continues to rely on paper-based processes that are susceptible to security vulnerabilities. Individual transactions can take as long as 90-120 days. Blockchain can digitize the whole trade finance lifecycle with increased security and efficiency.
Blockchain technology allows:
Insurance
Property and casualty insurance claims are prone to fraud and claim assessments can extend long periods of time. Blockchain can securely streamline data verification, claims processing, and disbursement, reducing time interval significantly. It allows:
Up to 95% reduction in errors, due to the elimination of out of sync ledgers and reconciliations
Up to 40% increase in efficiency, thanks to straight through processing and one source of truth
Up to 25% improvement in customer experience, thanks to faster processing and use of digital channels
Up to 75% reduction in capital consumption, thanks to quicker settlement of trades, straight through processing, and freed up capital flows
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