Financial sector contains Companies or organisations that provide financial services to various customers. There are different financial service offering companies in this section like, banks, investment and insurance companies, businesses, brokerage firms, internet banks etc. Financial services are services that cover various businesses related to money. Companies in the Financial sectors play an important role as a mediator between the depositors and the borrowers. It takes the money from the depositors and lends to the borrowers who then use this money to buy assets or different services. It reduces the cost of trading of money and goods. Countries like USA, Singapore, Great Britain are some of the giants of financial sector, there are many other emerging economies which are still amateur in this sector. Such giants or developed countries are effectively making use of modern technology like Artificial intelligence, machine learning, data analytical tools NLP etc and making new innovations in this section. These countries are making a good use of the concept of blockchain. The financial companies which make use of such technologies in financial sectors are termed as Fintech.
Blockchains are a long list of records which keep growing continuously. These records are known as blocks and they are connected to each other using cryptography. A cryptographic hash of previous block in present in the current block. Today blockchains are used in multiple areas. It is used as a distributed ledger for cryptocurrencies, mostly for bitcoins. Financial services are using blockchains are distributed ledgers in banks. It speeds up back office settlements systems, increases efficiency and reduces costs. It is also used in supply chains and video games. Today blockchain is still in its initial stage. The industry is waiting for further blockchain disruption especially around use of technology to manage regulations. Financial service providers are searching for solutions that can help their compliances in the regulated environment where they need to be well equipped with technology to adapt to new changes in the fund governance. Today all the global financial regulators are showing interest in using blockchain technology in the Fintech ecosystem. The essential target of blockchain based applications is to set up a mutual wellspring of truth for all actors on the system regardless of whether they have clashing agendas.
Many financial giants of the world are using this technology. Some of the top financial companies making use of this technology are
- Bank of America
BOA has been awarded a patient which highlights how the cryptocurrency data can be stored by companies. The BOA has also gained a patent related to cryptocurrency. This reflects its efforts in being prepared for the future growth. BOA has also come up with a customer system with three parts wherein the first part contains the customer accounts and the other two parts contain accounts held by the businesses.
- Commonwealth Bank of Australia
The Commonwealth Bank of Australia collaborated with the government run digital innovation centre DATA61 to do a trial on a blockchain powered smart money system for Australia’s national Disability Insurance Scheme. Data61 is a part of Commonwealth Scientific and Industrial Research Organisation which carries out a research on large local Industries.
- Itaú Unibanco
This is Brazil’s largest private bank. It has created blockchain based platforms for small business loans by collaborating with the standard chartered bank of United Kingdom. This project came out with flying colours after actually implementing it in real world and real data.
- Allianz SE
It is working on a concept of token which would help in moving the money between its affiliates around the globe without any currency conversions and other banking channels. For this project, a block chain start-up has created a proprietary block chain.
This Japanese bank has developed a new cross carrier mobile payment service which is powered by blockchain. SoftBank collaborated with Synchronoss Technologies to develop this product.
- PNC financial services
It makes use of Ripple Net to make international payments for its customers. xCurrent, which is Ripple’s blockchain solution will be used in treasury management to speed up overseas transactions held by US commercial clients. According to Ripple, xCurrent will allow overseas clients to receive payments against their invoices, thus improving the management process.