Disruptive innovation in financial services industry: Blockchain

The global financial system serves billions of customers and circulates trillions of dollars a day.But the system isn't flawless, added cost due to fees and delays, intermediaries, creating discord through inessential and arduous paperwork, and paves way for illegal activities.This all adds cost, ultimately bearing the burden on consumers.But the solution to this concern has arisen: Blockchain.A blockchain is "a decentralized ledger that maintains transaction records on many computers simultaneously.Once a group or a block of records is entered into the ledger, the block's information is connected mathematically to other blocks, forming a chain of records permanently which cannot be altered."Blockchain technologies are being called as the next big disruptive innovation in the financial services industry.Though we're in the nascent stage of development of this technology.As with other new technologies, blockchain is undergoing a phase of invention and experimentation and a lot of legalities have to be resolved to facilitate the universal adoption of these technologies.Even though Blockchain technology was initially developed for cryptocurrencies as the public transaction ledger, however, beyond cryptocurrencies, this technology has been considered for myriads of other applications as it imparts unique benefits including antitampering, security, decentralization and transparency.In this article, we outline the ethical challenges, ways to capitalize the blockchain technology and its benefits to the financial services industry.