Blockchain is a new-age technology that works on peer to peer topology. Information can be stored throughout the network on different servers. Anyone can access the information in real-time but they cannot change/modify it. The security measures are enhanced in the Blockchain technology. It works as a digital ledger where the information is duplicated throughout the server. Blockchain technology has revolutionised the way the financial market used to work. One can easily record financial transactions using Blockchain technology. Read on to know more about Blockchain technology in the financial market and the impact of the recent Covid-19 outbreak on the financial market.
How Blockchain Has Changed The, Financial Market?
Blockchain is changing the working culture of the finance industry in the following ways:
- Huge amount of transactions is carried out daily in the finance market. Blockchain is making these processes faster and more accurate.
- Security and transparency are increased due to Blockchain. You may see the transactions of some other firm but you may not be able to alter it. The hackers also find a hard time hacking Blockchain technology.
- Cross border transactions are being made faster via Blockchain. Earlier, cross border transactions traversed through various banks, and the process was very slow. Blockchain also helps in cost optimisation in the finance market.
- Digital identity verification using Blockchain has helped fintech players to provide hassle-free financial services to their users. It also has reduced fraud in the market. Blockchain is enabled with cryptographic security.
- Blockchain is a decentralised technology which helps in creating contracts between two parties. It also makes sure that the financial rules and regulations are also met. Participants can make transactions using Blockchain technology without the presence of a central authority. Everyone has access to information but can only read it.
Covid-19 Impact on the Financial Market
The impact of Covid-19 on the financial market is as follows:
- The firms which had taken debt for their business are now facing more vulnerability towards the insolvency crisis because of abruption in financial services due to the Covid-19 outbreak. They have to do cost optimisation by reducing their employees and services.
- The stock prices have fallen due to this pandemic. There is a lot of market volatility in terms of equity and there is confusion among the stakeholders. Stock markets worldwide are witnessing a downfall.
- The movement of employees from firms to their homes because of the ‘Work from Home’ culture has made it difficult to monitor and analyse the performance of employees. The companies are doing their best to cope up with the changes.
- Bond and the debt market are also witnessing many changes due to this global pandemic. Many firms are facing disruptions in their financial systems and if the market volatility is not solved quickly, chances of the next recession are also there.
Finance Industry Forecasts
The finance industry has adapted to the changes very well. A lot of financial services have shifted to an online medium. The fintech giants have done their bit in maintaining stability in the financial industry. The CAGR (Compound Annual Growth Rate) from 2019 to 2025 of the global finance market is predicted to be around 7.89% with the Asia Pacific as the highest growing market. The need for financial services in healthcare, retail, etc. will help in the growth of the finance industry until 2026.
The financial market is facing a lot of problems due to the Covid-19 outbreak but the new-age technologies like Blockchain, data analysis, artificial intelligence, etc. have helped in adapting to the ‘Work from Home’ culture and have also generated automation in the financial services. You can learn more about Blockchain technology by enrolling in various Blockchain courses available on the internet.