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The Banking System vs Blockchain Technologies

Since more and more people are recognizing and adopting blockchain practices, the potential of this technology to disrupt the banking and finance industry is becoming significant.
Blockchain technology is considered as a type of payment rail where money in the form of cryptocurrency can move to and from different parties. Through the blockchain, systems and services that use a middleman (like a bank), can be automated and the end-to-end parties involved in the transaction can connect without any administration needed.
Let’s take a look at how blockchain technologies compare with the banking system with regards to their different functions:
1. Payments
It is no doubt that banks are the leading institution for facilitating payments. Banks make it possible for cross-border transfer of money. However, it usually comes with high transaction fees and the process of money transfer also takes longer. Usually, it takes days before the receiver gets the money on his or her account.
Blockchain makes it possible to transfer money within minutes. The fees are also a lot lower compared to the fees charged by banks. Plus, there are no regulatory bodies that control the amount of funds you are transferring. Blockchain makes it beneficial for anyone who wants to transfer a huge amount of money without disclosing any private information to any authoritative control.
2. Loans and Credit
Most people turn to banks when they need a loan or if they need to extend their credit. They agree on high-interest rates and wait for the long approval process while still being unsure if they will get approved or not. 
Blockchain technology makes it easier for people who need a loan to find one that is fit for them. The network of blockchain is so broad, and it allows peer-to-peer lending. Through a decentralized registry of historical payments, lenders could verify the borrower's global credit score. As there is no financial institution involved in the loan agreement, interests are lowered and the approval process is cut short. 
3. Securities
Today, investing in securities and commodities need brokers, a central security depository, and custodian banks, among other external bodies. The complex chain of buying or selling security assets is prone to inaccuracy due to human error, as well as deception when a party cheats the numbers.
Blockchain technology revolutionizes this trade exchange as it makes the trading sphere more transparent. The decentralized database of digital assets are secure and do not need an external party to make the transactions. Cryptocurrency traders are able to view and verify trade transactions, whether they sign-up with a wallet provider or a crypto hedge fund, right on their digital screen.
4. Clearance and Settlement
The clearance and settlement of financial activities (opening an account, applying for a credit card, transferring of money, clearing of cheques, etc) relies on a manual system. It usually takes 2 to 3 days for a simple cross-border or bank-to-bank transfer. It also takes a minimum of 2 days to clear a cheque from a bank different from your home bank. This makes the process of money transfer slow and highly inconvenient, especially in the time of urgent need.
Blockchain technology eradicates this long process of clearance and settlement as transactions could be settled directly on a public blockchain. To put it simply, the transfer of information and funds are streamlined into one efficient process.
5. Trade Finance
Exporters and importers make use of banks and paper bills to exchange in international trade. To mitigate risks, these traders need a middleman to secure the trade transaction.
Through blockchain technology, the manual process of documentation and the transfer of money can be automated and streamlined in a quicker and more efficient process. Another benefit of blockchain technology is that traders can keep some information such as trade secrets and pricing confidential since one of blockchain technology’s pillars is secure privacy.
At this time, Bitcoin, which composes more than 50% of the cryptocurrency network, has become an accepted currency for several institutions and retailers. This strengthens the use and the potential of blockchain technology. 
But of course, complete industry disruption does not happen overnight. There are still a lot of things to improve in the technology and more regulations need to be laid out for the safety of everyone. However, it is clear that blockchain technology will surely transform the banking industry.