Blockchain, the technology that underpins cryptocurrencies, can transform the global economy. Its distributed ledger can hold information such as who owns a particular piece of property or a bond. The technology can be used to retain an immutable record of ownership and facilitate asset transactions between parties that distrust each other. This opens the door to build crypto friendly banking solution to infiltrate the traditional banking space and overcome the shortcomings of an ecosystem termed an anti-consumer solution.
When Crypto Weds Banking, It’s a win-win for all
Disintermediation: Blockchain enables transaction immutability and a distributed ledger architecture, which are essential for removing the need for a trust enforcer in the ecosystem. Tamper-proof distributed data creates an environment where trust isn’t an issue, allowing counterparties to work in the knowledge that they’re all working with the same version of truth at all times and that its history can’t be changed.
Transparency: Blockchain technology dramatically improves market participant transparency. Implementations of blockchain encourage the construction of a public record of activities in the ecosystem to which all market participants have real-time access.
Provenance: Since the asset first appears in a transaction on the blockchain, blockchain keeps an immutable record of transactions and thus asset ownership. This considerably decreases risk and the need for associated mitigation procedures for numerous asset types. Theft, fraud, and misselling of high-value assets and intellectual rights are reduced due to this capability. It also assists in creating a digital footprint on the blockchain for items whose provenance determines value.
Potential Use cases of Crypto friendly banking solutions :
Remittances: Cross-border payments have reached over $600 billion per year, and the market is expected to continue growing at a rate of around 3% per year, fueled by international trade. On the other hand, payment processing is often clumsy, opaque, and heavily managed. As a result, costs are skyrocketing. Fees are typically 2 to 3 percent of the transaction value, but they can be as high as 10%.
The rise of multiple fintech in the payments sector (about one-fourth of all fintech are focused on the industry) raises competition. It results in greater efficiency in some value chain segments. Furthermore, incumbents are working on their solutions. The Society for Worldwide Interbank Financial Telecommunications (SWIFT), for example, is working with banks to improve the cross-border payments experience through its global payments innovation project. However, by addressing some bottlenecks, blockchain may generate value. Payments might be made and finalized in minutes rather than days if counterparties exchanged cryptocurrency assets (digital currencies that do not require a central governing body) instead of fiat currencies. Blockchains’ distributed nature would increase transparency and immutability (data recorded to blockchains cannot be altered). According to McKinsey, blockchains used in cross-border payments might save $4 billion each year.
Fraud Detection and KYC Operations:
Retail banks have made considerable investments in automation, standardization, real-time data sharing, and predictive modeling to combat fraud, protect data, and prevent money laundering. Because of the significant operating-model changes and manual labor required, these initiatives have resulted in more extended onboarding periods and more essential expenses. Blockchain technology could be a viable option. Customers can utilize a digital fingerprint, which, as an actual fingerprint, can be used as a unique identity for onboarding or account opening, thanks to blockchain-based technology. Any bank in the network can refer to it because it’s recorded on a distributed ledger. The owner of a digital fingerprint can use it to open new accounts and establish their identification anywhere in the world. The decentralized blockchain framework removes overlapping KYC and AML compliance checks (banks share authenticating information), reduces information burden, and allows banks to communicate data as it becomes available.
Risk-Free Lending Solutions:
Financial institutions are frequently forced to make risk-management choices based on restricted data obtained from a small number of brokerages and agencies. The data may not even exist in some circumstances. Unbanked people (about 40% of the world’s population), underbanked people, and micro-businesses may not have made enough non-cash financial transactions to be considered creditworthy. As a result, banks are more cautious in their credit choices.
Blockchain technology can pool vast amounts of data that can be anonymized and safeguarded via the encryption algorithms used by the ledger. Without express permission at the time, data on a distributed ledger might be accessed (customer consent can be granted via preprogrammed smart contracts). Any bank in the network might theoretically examine data submitted by another bank. As a result, quicker judgments, more efficient processes, and the possibility of a more informed credit-allocation process should be possible.
What is a White Label Crypto Banking Solution?
A white label crypto bank solution is a market-ready solution with ready-to-deploy back-end. The front-end can be easily customized as per a brand’s needs and the software can be quickly launched into the market.
A white label crypto bank solution eliminates the need to build crypto friendly banking solution from the ground up, thereby saving the development time and cost.
Key Features delivered by White Label Crypto Banking Solution:
Excellent UI/UX for Smooth navigation – A white label Crypto banking solution must-have functionalities to design an impeccable web/mobile solution that is easy to use and attracts users to perform transactions.
Client onboarding — when a client signs up for your services, they go through an onboarding process in which they are given all of the essential information to set up their account. A crypto banking white label solution can use smart contracts for this purpose.
Savings and checking accounts – a white label crypto bank solution can enable you to provide services such as checking and savings account management to your clients at a relatively low cost.
Virtual card issuance — you can issue virtual debit and credit cards to users using a private label crypto banking platform.
Bill payments made simple – white label crypto banking can assist you in providing convenient and straightforward bill payment operations.
Bill transfer systems for online payments – a user can transfer money due to a biller in a single transaction.
Personal loans – provide several services to assist users in managing their finances and obtaining personal loans in less time-consuming ways.
Deposits and withdrawals – A white-label crypto solution can help you build a platform that supports depositing and withdrawing funds at ease on your mobile phone.
Transactions in both Fiat and Cryptocurrency – An ideal white label crypto banking solution can help its users/consumers convert their deposits in both Crypto and Fiat currency quickly and without paying hefty charges on conversion.
Space for cross-selling other financial solutions – The banking sector relies heavily on landing and holding reserves. However, OTC products such as insurance and investment solutions have steadily grown their share in overall contribution in Banking revenue. A crypto-based white label solution must have space for such products, which provide additional avenues of income for a banking enterprise.
Conclusion It’s critical that new platforms can accommodate the continued maturity and stored value of cryptocurrencies and CBDCs at a time when many institutions are undergoing core reforms. This does not necessitate a huge initial speculative investment in the hopes of a subsequent profit. What’s needed is a componentized architecture that can accommodate extra bitcoin capabilities as well as integration with specialized exchanges. If you are thinking of developing a Crypto Banking solution for your venture, hiring a reliable blockchain development company is essential.
At Antier Solutions, we offer customized services to develop and deliver crypto-friendly banking platforms. We provide a white label crypto banking solution that offers complete services – from user onboarding, borrowing/lending to credit/debit cards and more. In addition, we specialize in the development of custom banking platforms from scratch.
Schedule a free demo of our white label crypto banking solution or connect with our subject matter experts to share your business needs.
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