For many customers, sending money home is a lifeline; for banks, the process can be slow, expensive and inconvenient. By using distributed ledgers, banks no longer need to consign funds to limbo, as they can settle in near real-time, reducing operational overheads and improving customer satisfaction. Bitcoin offers international payments, direct peer-to-peer, with zero (or very low) fees, and using military grade encryption technology
Blockchain for Interbank Transfer
Blockchain technology to make local and cross-border inter-bank fund transfers fastest. Blockchain is the enabling technology behind the virtual currency, Bitcoin. It is essentially a digital ledger which records data and lumps them into “blocks”, which are then securely encrypted and chronologically bound together into a “chain”. The ledger is distributed across all parties within a network, where all parties have to come to a consensus to authenticate the transactions. It is therefore a form of distributed ledger versus the traditional ledger which is maintained by a centralised institution, thus removing the need for a central intermediary.
The benefits of using blockchain technology, payments:
- More secure: The funds transfer data is recorded in the digital ledger which, once encrypted, cannot be modified or tampered with. This keeps the transaction information private and secure, reducing the risk of fraud.
- Faster: With the removal of the intermediary and the need for manual processing, the funds transfers are directly conducted between the originating bank and receiving bank, cutting down processing time. For instance, funds transfers between Singapore and Malaysia which typically require up to 1 day could be completed more rapidly..
- Cheaper: Does away with intermediaries and manual processing, which translates to lower cost.
- More transparent: With the removal of the traditional intermediary, there is visibility of transaction flows between senders and recipients and the transactions can be much more easily tracked.
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 firstname.lastname@example.org.