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Modern society has witnessed the increasing adoption and prevalence of blockchain over the past couple of years. Still, there are plenty of people who still believe that crypto will fail, and they have been expecting it to fail since it first started. However, the outcome is completely the opposite and more people join some of the networks every day.
The technology got deep into every industry. In fact, so deep that even Nascar betting now has the availability of using crypto to place your bets. Anyways, we will try to make it clear how fintech connects with crypto below, so make sure to keep reading to learn more!
Even though mistrust towards crypto is still fairly noticeable in some parts of the world, we can clearly see that investing in digital currencies is on the rise. Usually, countries with stable currencies are still not fully determined to invest in crypto, but we expect huge changes in the future in these fields. Therefore, new markets in the fintech industry are ready to be filled with crypto.
In fact, we have noticed significant growth in the fintech industry over the past couple of years. Some statistics predict that it will grow to about $160 million by 2023, and a big chunk of it is thanks to the implementation of cryptocurrencies.
People with no bank accounts but who use smartphones are also one of the target groups to fintech services once crypto is implemented. A vast market for crypto-powered services related to fintech is starting to roll out for new users every day.
Money Transfer Efficiency
We all know how excruciatingly slow can transaction approval be when it comes to traditional financial institutions. In order to be approved, the transaction needs to go through multiple levels of bureaucracy. It even becomes more exhausting once you find yourself in need to transfer funds internationally and between organizations.
Crypto is developed differently and all the delays and inefficiencies that come with traditional money are completely removed. You can move money in just a few moments, but you also don’t need to use a middleman, which dramatically reduces the costs of a transaction. Considering that transparency, speed, and convenience are the foundation of fintech, cryptocurrency really shows amazing matching aspects.
Money laundering, fraud, and identity theft are real issues for the fintech industry, even though they could be called market disruptors. These problems can be very intensive in terms of time and challenges people in the industry have to face. Thankfully, verifying transactions is a lot easier on a decentralized ledger.
Fraudulent activity is almost impossible on the blockchain, considering that documents on the network can’t be removed or manipulated in any way. This is one of the reasons why traditional banking services and products have become keener to fintech solutions. Therefore, this is also where crypto and fintech go hand in hand, each hide has good things to offer. Regulation is one of the hardest things to do in the crypto world, and pro-fintech solutions have been proven to work.
Using Blockchain as a Storage
A significant positive impact is noticed in the data management systems when service administrations are powered by Blockchain. Still, it can be quite an expense to support traditional data management. This is exactly why fintech companies are outsourcing the services to their blockchain partners. It provides them with IT infrastructure, maintenance, installation, and purchases.
It is expected that crypto will play a very important role in formulating products and services that fintech companies come up with. Potentially, this could offer unmatched efficiency and possibly offer new doors to other markets too.
What are the Risks?
As with everything, crypto also brings some risks to the industry. Luckily, the solution for most of these problems is quite easy and straightforward since all you will be dealing with are minor inconveniences.
For example, operational inefficiency can be a problem for some users due to the lack of required governance. Additionally, there is always a hacking risk since everything is based on the internet. Stablecoin emergence and utilization of assets are also some of the concerns for crypto users in the fintech industry.