【Report】Blockchain technology: the trump card of financial innovation

A recent report on Fintech innovations calls blockchain technology the ace in the hole for financial innovation, with the potential to change the way the financial system works today.

Ever since Bitcoin became popular, it has been hailed as a revolutionary technology that could change the financial world. While Bitcoin may not have the same impact as ATMs and PayPal, the impact it has had is still real.

Innovation in financial technology began as early as 1970. A recent report from Business Insider Intelligence states that the ongoing evolution and impact of financial technology is greater than the role played by ATMs, PayPal, and even Bitcoin in the financial system.

ATMS changed the way people interact with banks, leading to a certain degree of automation. Then PayPal came along and reduced people’s reliance on banks to store and transfer money. However, PayPal account holders were still required to use traditional payment methods to store funds in their accounts. But the emergence of Bitcoin has brought a new level of disruption, which means that banks can be completely removed from the trend.

Although Bitcoin cannot completely replace banks today, it shows such potential. The development of the new era of financial technology now relies on Bitcoin, more specifically its underlying technology blockchain, which many startups are currently researching. A recent report titled "Fintech System Report: Measuring the Impact of Technology on the Entire Financial Services Industry" provides a new perspective on the future of financial technology.

It depicts a war between the old powerful financial groups and the emerging startups that aim to change the decades-old system. As far as war is concerned, there will always be winners and losers. As for who will have the last laugh, only time can tell.

Ongoing battles continue, including the battle between traditional banks and online banking systems, the battle between traditional lending markets and peer-to-peer markets, and the battle between crowdfunding, traditional money management and robo-advisors.

In all of the above cases, the new alternatives are technology-driven (including blockchain) and require minimal human intervention. The report predicts significant changes in banking, lending and finance; payments and transfers; wealth and asset management; markets and exchanges; insurance, blockchain-based trade and more.

“Fintech will change the nature of nearly every financial activity, from banking to payments to wealth management.”

There are no clear winners at this point. Both traditional financial institutions and new-age startups are trying to overcome their own challenges and come up with a winning solution. It is a matter of survival for both sides.

While the report showcases one or two remarkable innovations, it still sees blockchain as the trump card. Whether or not Bitcoin can change the financial system as a currency, its underlying technology is what everyone is aiming for.