Could blockchain help Two billion people to have a bank account

Blockchain is the second generation of the internet, the first generation brought us the internet of information. The second generation, powered by blockchain, is bringing us the internet of value; a new, distributed platform that can help us reshape the world of business and transform .

The blockchain, essentially a database and a giant network, known as a distributed ledger, records ownership and value, and allows anyone with access to view and take part. The asset database can be shared across a network of multiple sites, geographies or institutions. All participants within a network can have their own identical copy of the ledger. Any changes to the ledger are reflected in all copies, like a Google doc.

There are two billion people lack access to a transaction account. However, like most blockchain applications, people tend to talk about theory and ignore the aspect of implementation. It is as if the general public just knows what blockchain is and will adopt it because of the buzz surrounding it.

Studies have shown that having a basic bank account automatically raises standards of living: people save more, they can borrow for education, start a business, buy property and so on.

In this digital era, age-old traditional business model is fast fading… To sustain market share and to have an edge over competitors, it’s essential to redefine your business models. Blockchain offers consumers opportunity to achieve greater control over their information. This will impact on most organisations, as they increasingly rely on the acquisition and application of customer data and secondly, Blockchain, however, can power a KYC shared ledger that multiple banks in a region can use. With this system, only one bank needs to onboard the customer.

Now, when that customer goes to another bank or insurer, the new institution can look up the customer, see they are already on the shared ledger and all the proper documentation has been verified. This second bank can now open the customer’s account immediately.

If the customer changes jobs or addresses, the second bank can update the system and all the banks on the shared KYC ledger have the latest information. They all trust the data. As a result, banks lower their compliance costs and reduce all the friction in onboarding new customers.

KYC, payment and insurance – these are three direct ways to accelerate financial inclusion using the blockchain. By 2020, there will be 9.2 billion mobile phone subscriptions. That’s more than one for every person on Earth and lastly, Smart contract systems will allow for real-time claims management, so the customer doesn’t have to spend time gathering the materials, making copies, mailing them in and then waiting three to six months for the payout.

Lastly, Blockchain technology plays a vital role in transforming the financial services industry and is poised to truly disrupt various industries by making processes more transparent, secure and efficient.

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