The and some Bank (Spanish Bank Santander) estimates

The blockchain technology will
provide new solutions to the old problems. It will make the traditional system
more reliable, transparent, efficient, secure and will also reduce expenses as
well as promote growth in the industry. It will create a significant innovation
in traditional record keeping and value of exchanges by removing the need for a
central authority to act as intermediary during a transaction transfers and
will offer a real time transfer of fund transfer and settlement in facilitating
quick, transparent and inexpensive value of exchanges due to its distributed
consensus mechanism. One of its main benefit is the use of Smart Contract. In
Smart Contract, if two parties get agreed for any deal such as mortgage, trade
and purchase on their own rules and conditions then they would be able to
create a transaction without the need for a third party, hence it will reduce
costs, time as well as the risk of fraud as the smart contract will monitor the
whole scenario from buyer to seller and will release the funds to the seller
upon the completion of deal, otherwise will cancel access to the digital keys
as guarantee. This will make the international payments more reliable, faster
and cost effective.

It takes 1 to 4 days to complete
a transfer in traditional banking systems depends on the currency involved,
payment method, bank holidays and do settlements once in a day between each
other, excluding the bank holidays and weekends whereas blockchain technology
allows the completion of a transfer between any different banks within minutes
around the clock and 365 days out of a year. There are no weekends or bank
holidays in blockchain technology’s transactions and these can been done
instantaneously and would just need the confirmation by minors and time
required for the validation of a block by the consensus mechanism.  Banks feel that they
will be able to reduce various costs and some Bank (Spanish Bank Santander) estimates
suggesting that their infrastructure costs could reduce for cross border
transactions, regulatory compliance and the trading of securities by US$15 to
US$20 billion annually from 2022 by employing blockchain technology; consequently
real time settlement will increase profitability and decrease liquidity and
operational costs. Therefore it will solve many existing problems in the
banking industry that can be seen in the given table below.

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