Blockchain The New Wave In Fintech And Retail Industry

Blockchain is revolutionizing FinTech and Retail. While this may seem a general statement, let’s quickly look at some statistics that prove the rate at which blockchain is promulgating across both these realms.

Let’s start with FinTech. According to Statista.com, in 2018, blockchain’s use in banking was USD 0.28 billion. But with an almost 100 percent rise every year, the technology’s use escalated to USD 1.46 billion. This year, it

(Source – https://www.statista.com/statistics/1229290/blockchain-in-banking-and-financial-services-market-size/)

Blockchain’s use in retail also is abundantly promising as well. According to stats published on Allied Market Research, blockchain had a modest value of USD 83 million in 2018. However, the technology is expected to be valued at USD 11.18 billion by 2026, with a CAGR of 84.6 percent from 2019 to 2026!

(Source – https://www.alliedmarketresearch.com/blockchain-in-retail-market#:~:text=Blockchain%20in%20Retail%20Market%20Statistics%20%2D%202026,84.6%25%20from%202019%20to %202026.&text=These%20factors%20drive%20the%20market%20growth%20for%20blockchain%20in%20retail%20industry.)

Now, that’s interesting, convincing and promising, isn’t it? But for a business owner, irrespective of whether from banking or retail, at the individual level, what will matter more is how will blockchain benefit his business.

And that’s obvious, as every technology should carry some strategic and commercial benefit with it to make it a name every business relates with. So, here’s a blog, which is an excerpt of an interview with one of the higher officials of Qodequay Technologies. It highlights how blockchain will benefit FinTech and retail in the future.

Interviewer: Why should FinTech players adopt blockchain?

The first benefit is that blockchain helps reduce operational costs for a bank. It does so by improving capital optimization. It eliminates the need for intermediaries such as custodian banks (that facilitate bank to bank money transfer) or clearers. Of course, these intermediaries come at a cost borne by the bank. But blockchain makes peer-to-peer transactions possible. So, while a bank will have to invest in blockchain, the investment cost is significantly less compared to the fee per transaction that banks pay intermediaries.

Additionally, blockchain reduces counterparty risks. It settles transactions instantly and removes a considerable part of the risk that the counterparty cannot meet its obligations. This risk is an expense for the bank. Blockchain eliminates it!