Blockchain potential to smarten up the financial industry

December 7, 2016

Blockchain is the first native digital medium for value, just as the internet was the first native digital medium for information. The heart of digital currency is powerful, decentralised technology that is revolutionising the way people around the world exchange value, blockchain can be an effective alternative to inefficient legacy infrastructure and services in underdeveloped markets such as Africa.

  • Digital Wallet potential

A system that securely stores users’ payment information and passwords for numerous payment methods and websites. All transactions are happening via the distributed ledger technology. It hence allows transfers to other local wallets and also payments to merchants.

Digital wallets can be used in conjunction with mobile payment systems that allow customers to pay for purchases with their smart phones. They can also be used to store loyalty card information and digital coupons.

There is potential for achieving new levels of customer analytics through the adoption of digital wallets, including:

–  New kinds of offers based on a consumer’s real-time location and time of day, in conjunction with her purchase history and product preferences

–   Contextual information about consumers’ spending habits

–  On-site behavioral targeting of consumers, including purchase recommendations and offers while a shopper is in the store

  • Smart Remittance solutions

The cost of remitting money averages 8.4% globally, driven in large part by the legacy brick-and-mortar distribution networks and multi-bank settlement chains of incumbents like Western Union and MoneyGram.Using the Bitcoin blockchain as a back-end to transact local currency provides a clear way to ensure that the customer can feel comfortable with the product, while also receiving the cost and technology benefits of the blockchain technology.

Using the blockchain in this fashion will not only lead to more value accretion to remitting customers, but it will also be the kind of radical value proposition improvement that will be required to attract customers and break them from established habits around sending and receiving money.

Similarly, the blockchain can be used in remittances to enhance pricing transparency and provide better transfer security, as well as be used as an on-ramp for other technology driven financial services. It’s important to also consider that while blockchain can help lower costs and smooth transactions, it alone does not make a company poised for complete success -– there are other huge components of a remittance startup that need to be taken into consideration, such as cash-in/cash-out points and a unique customer acquisition strategy.

  • Digital KYC

Certain groups of individuals do not have access to traditional financial services because they lack verifiable identification. Governments and individuals alike understand the complex nature of identification, and while some low-income individuals prefer to remain anonymous, the systematic and individual costs of doing so remain very high. Identity, although quite an abstract concept, is certainly a crucial element for all kinds of interconnected entities. Identity is what brings trust to social life. By using the blockchain, individuals can receive a digital identity for transacting value nationally and internationally with relative ease.

The Anglo African team can assist you in unlocking the full potential of FinTech for the prosper of your business. If you have any queries, or if you would like further information, please contact us on 2331636 or by e-mail at contact@infosystems.mu.

 

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