FinTech could be defined as an industry of technology that is or could be applied to the financial world. It is the technology that will help the companies manage their financial aspects including the business processes and models. FinTech is not new. It has been there for a decade now, acting as the basis for end-to-end processing of the financial transactions. Currently, FinTech uses the Internet via cloud services and stores the all the important information on the servers which are prone to a data breach. The details of a user are held with the bank and an individual has no control over the security of their own information. Authentication methods and secured transmission are the major issues faced by FinTech at the moment. Ensuring the authenticity and identity of the person signing the documents, supervisory controls on the financial markets, transaction control, insurance claiming processes, etc. are some of the issues created due to the oversight of the Financial industry.
This is where blockchain comes in to solve all these problems. With the application of blockchain in FinTech, all the data available will be decentralized. All the transactions taking place will be authorized by the miners, making it immutable and unhackable. With the help of the public ledger, all the transactions recorded will be on the chain and validate each and every other transaction, making it reliable and secure.
The blockchain technology will discard any third party trying to get a hold of the data and make it a peer-to-peer transaction, giving everyone complete control over their data security. The transparency that an irreversible ledger provides would make financial operations smooth-running. Moreover, the ability to create smart contracts would significantly decrease the possibility of defaulting on payments. This way blockchain would reinvent the way FinTech industry operates making it more secure and stable than before.
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