Blockchain

Improvements in blockchain-based business strategies

Blockchain, the technology on which bitcoin is based, aims to revolutionize the financial world in order to stop trading with banknotes and coins; however, there is much more in the background of this technology that has given way to remarkable strategies in the sector.

BBVAOpen4U
|
02 Aug. 2019

Blockchain technology has demonstrated in recent years, since Satoshi Nakamoto created this protocol in 2009, the great savings that can be made by institutions through its implementation. It optimizes many processes while creating more effective, transparent and convenient services for customers.

These are some of the improvements that are taking place in different business strategies and processes thanks to blockchain applications, even though it must be borne in mind that this is “still an immature technology” in which "the first steps are being taken but it's progressing very quickly," according to Carlos Kuchkovsky, BBVA's CTO of New Digital Businesses.
 

1. Efficiency and immediacy

Blockchain protocols are already beginning to be applied in certain business strategies. In fact, according to Alicia Pertusa, BBVA's Investment Banking Head of Digital Transformation, "It's a different way of conveying information and value, and it does so faster, cheaper and more securely."

Pertusa underscores the value of these processes, since they allow immediacy (real time). This results in a better customer experience, which is going to be "radically different", because there is greater visibility when a transaction is made. "This allows for very rich information" thanks to the multi-distributed database system.


2. Transparency

A study by consultancy firm PwC highlights that 60% of banking professionals claim to be familiar with the blockchain technology protocol, which could radically change the industry.

Alicia Pertusa highlights the improvement in transparency that this process entails, above all, "in terms of the information that is transmitted between customers and institutions."

The use of this technology allows banks to slash costs, while also ensuring greater transparency for transactions, and thus helping operators to comply with regulations.

All thanks to blockchain's very nature. Technology does nothing but create a public accounting system that, at the same time, preserves the anonymity of its users.


3. Security

The so-called blockchain protocol provides security by means of private keys, since blockchain is a kind of logbook in which any entry remains unchanged over time and will be noted forever.


4. Exchanging assets

Beyond the use of cryptocurrencies, blockchain technology can revolutionize that mix of technology and finance that is fintech thanks to so-called sidechains. This branch of blockchain technology offers the most possibilities for the future, while also posing the most challenges to the financial sector. After all, it could mean the end of economic transactions as they have traditionally been carried out.

Sidechains exist to record specific non-cryptocurrency market transactions, since the assets exchanged may be currencies, but also deeds of a property or indeed any type of contract.

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