COVID-19 has not only impacted consumers’ financial well-being worldwide but has also impacted their trust in financial institutions. Today, FinTech brands are leading the charge in gaining consumers’ trust. In fact, 37% of consumers say a FinTech firm is their most-trusted financial services brand, compared with 33% who name a bank and 12% who say they trust a wealth management firm the most. So, how can blockchain technology help your financial institution gain trust?
What is blockchain?
Blockchain has been best known for its role in cryptocurrency, but this isn’t all it can be used for. Investopedia explains it as, “a distributed database or ledger that is shared among the nodes of a computer network.”
Put simply, blockchain technology stores information digitally, in a secure and decentralised format. The best part about it is that it’s secure and guarantees the fidelity of data, without the need for a third-party system. Overall, it can improve trust as consumers don’t need to solely trust the financial institution. Instead, they can base their trust on the immutability of blockchain technology.
Who can benefit from this technology?
“ “Blockchain has the potential to cut costs, speed up transactions and promote greater financial inclusion.” – Lucy Gazmararian, Crypto and Fintech Advisory, PwC Hong Kong. ”
All financial institutions can benefit from implementing blockchain technology. Consumers are demanding greater transparency from the finance brands they work with, whether it’s their bank or asset management firm. In fact, a study found that 94% of people are more likely to be loyal to a brand with complete transparency.
Owing to Blockchain’s decentralised nature, this means data can be more transparently viewed by having a personal node or by using a blockchain explorer. So, finance brands can get the best of both worlds, with data being able to be viewed easily by consumers while maintaining high security.
Pawel Kuskowski, CEO and Co-Founder of Coinfirm, states: “Blockchain is transforming the investment and asset management market and is improving transactional security and transparency”.
Blockchain can help with more than just trust
According to Lucy Gazmararian, Crypto and FinTech Advisory, PwC Hong Kong, “Blockchain has the potential to cut costs, speed up transactions and promote greater financial inclusion by streamlining cross-border and remittance payments”.
Overall, it can provide several benefits to finance brands beyond simply security and transparency. It can:
- Reduce costs
- Improve customer data storage
- Improve operational efficiency
- Enable faster settlement and money transfers
Most of these added benefits of blockchain can help the digital customer experience. From enabling easier money transfers to improving the operational efficiency of digital finance technology, it can deliver easier financial management tools to users.
At the core of it, blockchain technology can help your finance brand improve trust amongst consumers by providing greater security and transparency. With trust being a key area where financial institutions are losing out to FinTech brands, it pays to invest in technology that can help.
