An army of fintech innovations is just around the corner to make their big introduction and the Financial Services sector couldn’t be more excited. Especially the Blockchain and its implementation process are stirring up the conversation.
The Blockchain technology is a subtype of the centralised ledger concept where, instead of one middle party, financial transactions are shared amongst a worldwide-shared network of computers. This feature alone is said to have a huge impact on financial systems and mechanisms across the Financial Services sector.
In this fashion, Blockchain’s decentralised ledger could positively impact financial infrastructure and processes with its see-through and efficiently organised system. Furthermore, the technology will construct a firm foundation for the future’s upcoming fintech innovation. In the present it will challenge current business models.
Though at first glance seen as an evolutionary and beneficiary innovation, the Blockchain shows to have one big challenge that comes along with the implementation: the case of Digital Identity.
To drive the development of the Blockchain the case of Digital Identity needs to be examined further. Digital Identity is critical because it enables the Financial Services industry to conduct financial activities accurately and securely. The need for a top-down secure digital identity landscape is pressing due to its multi-layered nature: it empowers the existence of gaps and unwelcoming developments like malicious cyber-attacks that threat it.
To solve the case of Digital Identity, drive change and deal with the overall paradox of the Blockchain, financial institutions need to act upon the mentioned challenges. Opportunities, chances and benefits will only be met if Financial Service competitors, regulators and technology experts unify, collaborate and bundle their expertise and knowledge.