Decentralization, distributed accounts, smart contracts and other features of blockchain technology will rebuild the existing centralized financial infrastructure.
First, based on the decentralization of blockchain technology, the transaction, clearing and settlement processes in the financial system will directly realize reliable point-to-point exchange of value without a central clearing system, which will directly affect financial systems. such as payment systems, securities settlement systems and transaction databases.
Second, blockchain technology will change the current way of registering and certifying assets. Registration or certification of collateral and stocks, bonds, financial derivatives and other assets will be digitally recorded in the blockchain, which cannot be altered and can be verified. Tracking and inquiries can effectively resolve issues such as transaction verification and tracking disputes.
The third is to use blockchain “smart contract” technology to implement issuance, circulation, etc. currencies under specific trigger conditions in order to complete the transfer of value according to the schedule, so that only when specific conditions are met will it be automatically executed. For example, the central bank can issue digital currencies for specific purposes, so that these currencies can only be paid out when they enter a specific industry, so that industrial policies can be implemented with precision.
1. Challenge the bank’s financial operating model
Today’s banking industry, regardless of its business model or concept of risk control, has been rapidly rolling out investment banking, online banking, and smart banking as part of the economy’s new normal and of finance, but its operating system and logic has not changed significantly or even fundamentally, the traditional business of the banking industry is still the “ballast stone”, and the core is still stable.
In the future, with the widespread application of blockchain technology in the banking sector, its “decentralization” function will fundamentally change the way credit is created, which will not only improve the efficiency and the safety factor of the model bank’s existing business, but will also improve the efficiency and security of the bank’s existing business model.
Starting from the vision, it will also lead to changes in the way banks operate and major innovations in business models.
In the future, the function of financial intermediary will experience very big changes, and some roles in the existing financial system of banks will no longer be necessary, which will have a great impact on some sectors, some departments will gradually disappear, and new activities l unit can be established in the future.
2. Challenge banks to innovate in their ways of making profits
As the bottom layer of the architecture, blockchain features high reliability, simplified process, transaction traceability and many other rules established by distributed accounting and storage, decentralized structure, timestamping, proof of work, etc When improving the quality of data and other characteristics, when applied to the financial field, the greatest importance is to open new avenues for banks to innovate and make profits from the perspective of a underlying reconstruction, and to reshape the ecology of the financial sector in many aspects, including traditional financial companies and Internet financial companies.
For example, the multi-server functionality of blockchain dilutes the energy cost of maintaining servers, i.e. the cost of mining, making low-cost micropayments possible. Banks can exploit many users who have not obtained bank accounts in blockchain nodes. Develop new products for this part of potential users and explore new ways to make profit. Having learned too many lessons from the laggards, if banks do not accelerate their search for innovative profit models, develop new financial products and develop markets, not only will they fail to catch up, but they will gradually become a “channel”. Consequently, more and more industry giants have joined forces to invest or partner with blockchain startups, including banks, as well as investment institutions such as Capital one , Citi Venture Capital International and Fiserv Financial Services.
3. Challenge the bank’s data governance mechanism and capacity
The expansion of new areas in the financial industry and the advancement of new technologies are inseparable from information and data, and blockchain technology is a subversive application of data. Therefore, commercial banks should not only do a good job in data management, but also prepare for a distributed management model. To combine with blockchain financial technology, to enhance the ability of enterprise-level big data intensive analysis, transformation and application, through the establishment of unified and clear data standards, data connection is achieved, efficiency is further improved, costs are reduced, and data security and efficiency are ensured, to continuously improve the bank’s forward-looking and intelligent intensification level.