Blockchain has become a buzzword in recent times. It is widely used in banking apps to keep transactions safe and secure. This article will discuss some of its uses in banking mobile apps.
Blockchain technology is sometimes also referred to as a “distributed ledger.” The main principle of this technology is that it is decentralized and transparent. It means that the data are stored in many different places rather than kept at one central location. Due to cryptography, it is practically impossible to hack into the network or alter records without being detected.
The primary purpose of any banking application is to provide security for its users. With the help of Blockchain technology, the apps are designed so that it becomes almost impossible for hackers to penetrate your bank account or steal your money. This makes it easier for you to enjoy a safe and secure banking environment that provides privacy and transparency.
Blockchain applications offer many benefits to their users, such as:
1. Peer-to-peer transfer
Banking apps use blockchain technology in peer-to-peer (P2P) payments to transfer funds through banking apps. It will allow individuals to send money directly to each other without relying on central banks, financial institutions, or governments. The system will also enable them to receive the funds instantaneously instead of waiting days for a bank transfer to process.
2. Accounting and auditing
Blockchain helps in auditing through banking apps. Banks use blockchain technology to store information about their customers. It allows banks to create a database of their customers, which would be helpful for them in audit purposes.
With blockchain, banks can keep tabs on every transaction that comes through their system — and if something looks suspicious, they can stop it before it causes damage.
3. Buying and selling assets
A great example of blockchain in action is how it helps sell assets through banking apps.
There are different smart contracts, but one example is an escrow contract, which holds the money until certain conditions have been met. It could be saving money until ownership has passed or until both parties agree that a service has been completed to their satisfaction.
In banking and finance, these smart contracts can help reduce errors and fraud. They automatically enforce agreements between two parties, preventing money from being sent if a deal goes wrong and not releasing funds until all parts of the contract have been met. It is beneficial if there are complicated requirements or multiple parties involved in the deal.
The blockchain wallet will help you store, buy and sell assets through banking apps. The blockchain wallet is very safe and secure. It helps keep your digital money, with which you can buy or sell any purchase of your choice.
4. Digital identity verification
Blockchain helps in digital identity verification through banking apps. The system uses biometrics to authenticate people and is widely adopted by banks.
The manual KYC process was time-consuming and frustrating for banks and other financial institutions. It took weeks for them to verify the identity of customers who wanted to open an account.
It was because of the vast amount of paperwork involved and the lack of relevant information on the customer. Digital identity verification has eliminated this problem significantly by making the process faster and easier, especially for customers.
Banks can verify someone’s identity when they log onto a website with their bank account with blockchain technology. It reduces the risk of fraud and means customers don’t have to remember multiple passwords for every account they own.
5. Credits and loans
Blockchain technology is likely to increase the banking industry’s efficiency by simplifying the process of credits and loans. Blockchain is a secure, digital ledger of transactions that can be programmed to record financial transactions and virtually everything of value.
How does blockchain help in credits and loans through banking apps?
The answer is that there are no third parties involved. All the transactions are done through peer-to-peer networks. It is also known as distributed ledger technology (DLT). Because of this, there is no need for an intermediary to oversee the transaction.
The cryptocurrency Bitcoin has already been used as a form of remittance by many people worldwide. Banks have found that blockchain technology can be used more efficiently and at a lower cost than existing systems by providing more transparency and security to both parties involved in the transaction process. If you are planning to develop a blockchain-based mobile app, contact us today!