Blockchain & Innovation in the Finance Sector

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To find out how Alibaba Cloud’s products support innovation in financial services, download the Big Data and Blockchain: Innovative Fintech in the Cloud whitepaper today.

Cloud service providers now support every possible software scenario in the financial services sector. From simple one-click server setups to huge infrastructure racks serving global regions that maximize on valuable big data analytics by using machine learning and artificial intelligence (AI).

A decade ago, nobody could have ever imagined a public cloud services market supporting the world’s IT infrastructure in the way that it does today. Only a few may have dreamt of the current proliferation of cryptocurrency, blockchain, and the growth of the software Fintech industry.

The move away from traditional banking and in-house financial infrastructure is led by technology startups, fearless research and development, and a willingness to embrace change. Cloud providers influence the growth of Fintech in new and ingenious ways.

Behind the cryptocurrency craze is the peer-to-peer trustless database technology, blockchain. More commonly associated with supporting financial transactions, blockchain has use cases outside finance, especially now smart contracts and autonomous agents are making waves in the blockchain space. Smart contracts are executable programs that run on blockchain nodes allowing developers to utilize the unique features of a blockchain database.

Blockchain technology is now managing land ownership, energy distribution, transport supply chains, and industry-scale IoT applications, to name just a few different use cases. This technology benefits from transactional security, transparency, and traceability.

What Is Blockchain?

Blockchain remains the focus of cryptocurrency enthusiasts and Fintech companies, and now even the traditional banking industry is researching its own blockchain products and services as the benefits of a decentralized banking system outweigh many traditional approaches.

A decentralized banking system removes costly and unnecessary processes and workflows. There is no need for multi-level hierarchies, record tampering is eliminated, and a consensus mechanism can take over the entire transaction process, which commonly requires three or four intermediate third parties. Indeed, Accenture has predicted that blockchain will save the global banking industry up to USD $20 billion by this year, 2020.

The decentralized nature of the blockchain peer-to-peer network technology is also transforming security lending tracking, margin trading, and systematic risk monitoring. Decentralized stock market transactions save time and money. Blockchain helps with the settlement processes, raises the security level of post-trade events, and simplifies ownership.

Smart contracts — code running on blockchain nodes — further eliminate the need for trusted third-parties in a range of scenarios. Insurance is a good example. False insurance claims cost the industry billions every year. Anything recorded on a blockchain ledger is indisputable evidence, therefore insurance contracts recorded in this way eradicates the inherent trust issues, and the likelihood of errors, as well as the transaction costs.

How Can This Be Achieved?

Alibaba Cloud supports Fintech innovators with the Blockchain as a Service (BaaS) platform.

BaaS has an unlimited range of application scenarios over and above financial transactions. Specifically, the financial industry can use BaaS to store transaction records, record and monitor capital flow, and to manage supply chain logistics without exposing private information.

Alibaba Cloud’s Blockchain as a Service is secure and robust. It has a comprehensive security package which includes chip-level encryption, vulnerability protection, account security protection, and attack-defense for safeguarding critical financial data against malicious attack and tampering.

Alibaba Cloud’s BaaS platform supports public and private blockchain applications, blockchain deployment, smart contract implementations, consortium blockchain management, and various monitoring and maintenance scenarios that may be implemented with blockchain.

As cloud computing software continues to maximize efficiency and transparency across sectors globally, there is no better time to be investing in cloud-based Fintech products and services in today’s digitally-led world.

To find out how Alibaba Cloud’s products support innovation in financial services, download Big Data and Blockchain: Innovative Fintech in the Cloud whitepaper today.

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