Blockchain technology is a decentralized ledger that records transactions between parties without the need for a middleman. Allowing transactions to be recorded across multiple parties, allows for trustless and tamper-resistant systems.

This means that blockchain technology can provide certain financial services like payments and securitization without the need for a bank. It offers a secure and cheap way of sending payments that cuts down on the need for verification from third parties and beat processing times for traditional bank transfers.

Banks are facing an unprecedented wave of disruption. While they have traditionally been seen as the guardians of the financial system, they are facing the threat of being toppled by new technologies like blockchain technology.

It is not just about making payment transfers. There are many other areas in which Blockchain can replace Banking. The most prominent one is – handling customer data and protecting it from cyber security threats. Let us see how:

Banks must do a lot, and it is not always easy to find people who can do it. Believe it or not, it takes banks 3 months to verify information about a customer such as address proofs and much more. While with Blockchain it could be done in a few seconds. Blockchain tech uses technology that allows you to verify any document from anywhere in the world by sending a request to an authorized service provider. The service provider then checks whether the document is valid or not and sends back the results.

Not only is this process fast, but it is also very safe. This process is carried out over encrypted data that makes it virtually impossible for anyone else to access the information. This reduces the threat of a cyber attack to a great extent.

There have been many instances of blockchain replacing payments and KYC processes at multiple institutions. With the use of smart contracts or self-executing contracts, manual processes of compliance can be automated. This means that banks can write codes that automatically trigger certain actions when certain conditions are met.

Because the blockchain is decentralized and immutable, it cannot be tampered with by any one entity or group of entities. The result is that there are no third parties involved in verifying transactions as there would be with traditional bank accounts.

This means that if you want to move money from one place to another, then you could do so without ever having to deal with banks or other financial institutions who might try and hold onto your funds for their own profit margins (and incur interest charges along the way). This could save time and money—and it would be much more secure, too!

While there is a considerable uproar by banks and financial institutions against blockchain and cryptocurrencies, it remains to be seen whether blockchain can fully replace banking or will act as a supplement for smoother banking processes. For example, some claim that blockchain can be used to store information securely and make the transfer of money more efficient. However, technology has yet to prove itself in this regard.