Since the time of its invention, blockchain technology has delineated the change that it can bring in different business areas. Various features of blockchain technology such as immutability, decentralization, and transparency make it appealing for business sectors and domains globally. The banking and finance industry is one of the leading industries in exploring the potential of this technology. The growing use of blockchain technology in banking has uncovered the potential to disrupt this sector. This technology has several advantages in terms of adoption given its proposed features, but there are also some hurdles along the road which need to be addressed for banking and financial organizations to grow ahead. Let’s have a look at those challenges:
Major Challenges in Adopting Blockchain Technology in Banking
The blockchain technology is not restricted by any international rules and regulations that impose a standard on it. With the growing need for interoperability among large industries like banks and finance, there is a need for technology to be compatible with different systems and should have the potential to get adopted by the masses. Today, integrating the existing systems with blockchain technology in banking is a big challenge as the existing processes cannot be entirely eliminated. If the actual adoption of blockchain technology in banking can allow multiple systems to work together smoothly, operational feasibility can be achieved.
Banking and financial institutions are the entities that people trust for depositing their funds. Therefore, it is very important that the data of customers stored with the aid of blockchain technology in banking is secured and would never challenge their privacy. As the banking transactions made on a blockchain are available publicly, the need of exploring the potential of private blockchains is required. This is a serious concern in the adoption of blockchain technology in banking along with the resolution of issues like interoperability.
Private keys are the important components of blockchain technology in banking as they play a significant role in securing the data of an individual on the blockchain. However, a private key once generated has to be kept securely as once it is lost or misplaced, there is no way to get it back. Moreover, the use of encryption in storing data can be decoded and can make blockchain susceptible to the attacks of hackers.
Choosing the right technology that meets your every requirement is a turbulent task for companies. We at Infiniti Research understand this conundrum and have made a name for ourselves when it comes to offering insights on new technologies that can maximize your presence in the global market. To know how we can help you gain better insights into adopting blockchain technology in banking, Contact us now.