Can Blockchain Disrupt Banking?

What disruption means?

Since the term “disruption” was coined in the 1990s, it has come to signify so many different things that it has lost its original meaning. Disruptive and/or innovative are terms used to describe something that is “new.” In 1997, Clayton Christensen, a professor from the United States, coined the term “disruptive innovation.” Any invention that changes a complicated, expensive item as one that is simpler to use or more economical than the most convenient option.

Why is blockchain considered disruptive for banks?

The solution to this question can be found in three of a blockchain’s in-built properties: decentralisation, distributed ledger, and immutability. These are not the same as those of banks, which are centralised institutions.

Decentralised network

Blockchain is a peer-to-peer network that runs on a decentralised network. It manages all activities in the same way as a bank does, but without the need for a central authority to oversee all data. As a result, it may eliminate the middleman, returning authority to the asset owner (data or tokens carrying some financial value). All data is kept in blocks across the network. These blocks, which are time-stamped and connected to all previous and present transactions, are permanently preserved and cryptographically secure, balanced and updated. From here we understand what is chainlink and how it works.. Blockchain minimises the risks associated with data maintained centrally by storing it across its network.

Distributed ledger

A distributed ledger allows several parties to share a log of activities — such as arbitrary data or essentially anything of value. The capacity of blockchain to generate trust and transparency among all parties using it is what makes it so significant. Since the ledger is shared among all transaction participants, it exists in numerous locations at the same time. To provide transparency and avoid a single point of failure, each computer in the distributed network keeps a copy of the ledger, and all pieces are updated and validated at the same time. This makes manipulating entries or tampering with data without the knowledge of the other parties extremely difficult.

Immutable records

Its immutability is a third distinguishing feature. Blockchains are inherently resistant to data alteration by design. When it comes to validating new blocks, all blockchain networks use the same protocol. Once the system is set up with the initial standards, no adjustments can be done. Once logged, the data in any specified block cannot be changed without affecting all following blocks, which necessitates network majority consensus.

Where will blockchain have the most impact on banks?

Though blockchain is said to have an effect on every aspect of the banking markets, the most disruptive utilisation incidents are in cross-border payments and money transfers, stock trading, trading and settlement, trade finance and supply chain finance, regulatory ensuring compliance, and smart contracts. It is evident, though, that as the technology advances, there will be a plethora of new applications for blockchain technology.

Future banking eco-system

The banking ecosystem of the future will be considerably different from what we have now. This eco-system will be one of open innovation, cooperation, bank-fintech alliances, and heightened rivalry, sparked by blockchain technology and its disruptive nature. While middlemen will be much less necessary, there will be a rising need for collaboration between banks and other stakeholders in order to maximise the benefits of this and other emerging technologies. Newcomers, on the other hand, will face more intense competition.


Although this disruption caused by blockchain technology is still in its early stages, many experts believe it will accelerate quickly. As a result, the banking industry will undergo significant changes in the next years, with new firms entering the market. In the short run, blockchain may eliminate some roles in financial services.



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Kash Team

Kash Team


We're, the very first third party ecosystem partner invested by Terraform Capital. We're excited to be bringing the Anchor Protocol mainstream.