Financial Applications
The global financial system is exploring ways of using blockchain-enabled applications for financial assets, such as securities, fiat money, and derivative contracts.
Some of the highlighting benefits blockchain technology currently offers are:
- A massive change to capital markets and
- A more efficient way for performing operations like securities and derivatives transaction
- Digital payments
- Loan management schemes
- General banking services
- Financial auditing
- Cryptocurrency payment and exchange (i.e., e-wallets)
Given blockchains far-reaching capabilities, it is not surprising that different approaches and applications have evolved from its original intent. Examples of emerging blockchain uses include:
- Digital Currency
- Proof of existence
- Smart property
- Smart contract
- Decentralized autonomous organization (DAO)
- Non-fungible tokens (NFTs)
In current landscape, blockchain ecosystem comprises of 3 layers:
Applications and solutions:
This category aims on building applications and solutions with blockchain in financial services
Middleware and services:
This category aims at developers who want to build applications and innovate on top of the underlying blockchain and consensus protocols. All of the groupings in this category offer various entry points—including interacting with APIs, overlay technologies, integrated development environments, and a choice of software languages.
Infrastructure and base protocols
This category represents the infrastructure and base protocols that are still evolving, and the public mining infrastructure—for Bitcoin—that validates and secures the network. This category is typically in the space of core developers that are well versed in cryptology-based software technologies.
Insurance
Blockchain can simplify and secure multi-party operations of the insurance industry. Whether interacting with customers or dealing with other parties, Blockchain can reduce the challenges presented by multiple parties keeping their own records. As transactions occur, insurers can rely on blockchain’s distributed ledger technology to update and validate information against other records in the network; reduce management costs for policies, claims and relationships; streamline operations, and enhance customer satisfaction. Companies can also capture opportunities and revenue through new business models or new insurance products.
Some of the areas where blockchain can be an ultimate solution to current challenges in the Insurance industries are:
- With Blockchain multiple policies can be converted into “smart contracts” giving a single, consolidated view of policy data and documentation in real time. This allows visibility into coverage and premium payments, delivering automated notifications to network participants following payment events.
- A transparent blockchain solution allowing multiple companies to collaboratively assemble relevant records can streamline claims recovery. Its shared ledger capabilities can help insurers agree on claims, build trust that evidence is being shared and improve the overall customer experience.
- Blockchain can be the vital link across a vast ecosystem of third-party administrators and service provider networks. Its shared ledger transparency can help employers reduce errors resulting in improved claims processing, better provider management and lower operational expense.
- Blockchain helps ensure contract certainty and improve risk-handling capabilities — from managing contracts among reinsurers to maintaining shared accounts and managing claims payments. With transparency across the reinsurance value chain, blockchain can eliminate the need for participating companies to regularly reconcile their reinsurance accounts.
Blockchain can help streamline operations, reduce costs and enhance customer service. Blockchain technologies can also support emerging business models where firms share policy risk by working with other insurers.