How Fintech and Blockchain Can Change the Foundations of the Financial World

While we now use phones to initiate transactions and ask AI-powered chatbots to check our savings, the very core of how our finances work failed to keep up with the 21st century. Despite all the tech at their disposal, financial regulators still operate exactly the same as they did decades ago.

Although they’re fueled by our hard-earned money, financial entities hold the power to block our transactions, take countless fees, collect and keep personal data, and dictate the terms of how we use our own paychecks. It’s astonishing how little control we actually have in this arrangement despite the fact banks and other financial regulators are supposed to be helping us manage assets that belong to us, not them.

While most of us have been programmed to think centralized models are the only viable way of handling large amounts of money, the fintech industry has been pioneering various alternatives for years. Yet, while there have been some amazing achievements resulting from fintech trends, challenging the fundamental status quo of how our money is stored and handled proved itself too big of a barrier to overcome – at least, until now.

With blockchain, fintech might finally have the type of technology needed to make a true dent in our obsolete financial sectors. By leveraging this new factor in the financial equation, fintech companies can use properties inherent to blockchain systems to truly transform how our economy works.

Fintech and Blockchain, a Recipe for a Perfect (Financial) Storm

In a nutshell, fintech can be described as a root of innovation operating at the intersection of financial services and technology. Whenever you go online to examine past transactions or use a piece of software to manage spendings, chances are you’re relying on solutions that rolled out from the fintech sector.

The main calling card of fintech companies is enhancing traditional financial services through the use of applications. Figuring out how to improve processes such as mobile payments, money transfers, loans, fundraisings, and asset management can be regarded as the focal point of the fintech industry.

Obviously, the nature of these kinds of processes is right up blockchain’s alley.

While its reach extends far beyond economics, blockchain makes for a hand-in-glove fit with what fintech hopes to accomplish. This is, of course, in part due to its origins – the very first functional blockchain was used to run Bitcoin, so enabling secure and fair transactions is what distributed ledgers do best.

The use of blockchain in fintech opens a whole new world of opportunities for the financial world. With a little bit of luck and ingenuity, the rise of blockchain in fintech industry could pave the way to completely democratized methods of managing our money.

The Value of Blockchain in Fintech Industry

Essentially nothing more than a series of immutable blocks, blockchain tech can serve as a foundation for all sorts of fintech apps. In the hands of a proficient developer, a blockchain can transform regular financial processes into fully democratic and transparent procedures with secure, efficient transactions.

What’s more, fintech blockchain apps can eliminate the ever-present issue of trust between two transacting parties operating on equal terms. Between bulletproof identity authentication protocols and governance of smart contracts, applications of blockchain in fintech would be some of the most secure pieces of software on the market.

If we play our cards right, blockchain can be used to create a fintech spiral that completely revamps the industry. Financial transactions that require no middleman, peer-to-peer networks, lightning-fast transactions, no hefty fees or geographical boundaries, bullet-proof security, total transparency, etc. – these are all massive steps in the right direction, so it’s only natural that both fintech startups and industry giants have already started to push the envelope with blockchain financial networks.

Yet, while impressive, the aforementioned list does not truly capture the gist of what fintech blockchain apps can do – with such pieces of software, owners of assets can be handed back the control and power over what they own. At first glance, this may seem like a small tilt in the right direction, but in fact, it would arguably be the most remarkable reform the financial world has seen in the last century.