Blockchain in Finance

In September of 2008, Lehman Brothers, a well-established global financial services firm filed for bankruptcy, and over the next five years lawyers, accountants, and consultants from over 30 firms racked up more than $2.2 billion worth of fees trying to unwind what had happened. Could there have been a better way? In a blockchain future, yes.

Blockchains offer a permanent, tamper-resistant audit trail across even highly-complex business ecosystems. This gives finance and accounting professionals end to end transparency across operations and finance, but even more exciting, blockchains can actually merge business and operational activity with the movement of money. And that could be transformative. Let’s look at some of blockchain’s features from the perspective of the finance organization.

Read more : What is decentralized financial (DeFi) Layer by Layer

First, you can program the way money moves. Blockchains let you embed terms and conditions into the movement of money, automatically executing agreements along the way. So if a shipment arrives where and when it was supposed to, the payment process could be automatically initiated. Imagine how the accounts payable and accounts receivable process could evolve. When money moves only when rules are met. And you get a complete and tamper-proof audit trail along the way. It’s almost like placing your own embassy behind your trading partner’s firewalls. You can program in compliance roles and if a partner or a transaction goes out of compliance, permissions and funds could be automatically revoked according to preset agreements.

Cross-border payments could happen faster and more safely. Even inter-company transactions that have a complex landscape of tax laws and exchange rate and compliance requirements could happen safer and faster. Next, you can use blockchain features to cut the cost in delays that come from checks and balances in repetitive finance tasks. This may finally become that single source of truth that we’ve so long pursued. What if you could cut the time that your teams spend reconciling supplier and buyer data or what could you achieve when one CFO’s screen actually matches that of his or her counterparts on the other side of the deal?

Also useful to finance and accounting is near immediate insight. Blockchains offer new tools to help us get to a realtime picture of any given financial situation. And of course this unlocks a cascade of benefits. Imagine how you could optimize working capital across a business. How could you improve decision making or drive discovery of a new business direction? But there’s more. In a future that offers select transparency to financials in real time, imagine the speed with which you could do month end and quarterly close. We could even move in the direction of realtime financial statements. Think about how you could change the way you run your organization and do your work if you were able to truly merge business and operational activity with the movement of money.

 

Read more about Blockchain technology in Financial Industry :

Beginner Guide To Decentralized Finance (DeFi)

 

Blockchain in Finance

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