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Blockchain penetration in the banking sector: a look at the second half of 2022

In this blog post, we want to highlight the side of blockchain finance penetration in the banking sector, and talk about real use cases.

It's absolutely clear that blockchain technology gradually penetrates into all spheres of life, like healthcare, trading, telephony, logistics, gaming industry, etc., which we use in our everyday life. It is impossible to deny the usefulness of blockchain technology that is being introduced into our lives, even if it is invisible to an ordinary user.

Initially, the blockchain was created to transfer cryptocurrencies from one person to another without third-party involvement. With the development and adoption of blockchain technology and smart contracts emerging, new financial opportunities for the use of crypto banking have appeared, such as landing, farming, and staking, which are combined into the field of decentralized finance blockchain (DeFi). However, blockchain can be used not only in DeFi but also in the traditional banking sector.

In this blog post, we want to highlight the side of blockchain finance penetration in the banking sector, talk about real use cases, and take a look at the blockchain development prospects in the second half of 2022. The use of blockchain in the banking industry allows you to eliminate intermediaries in banking operations and automate many processes. The efficiency of the blockchain banking system is also increased by reducing costs. Banks can get additional sources of income thanks to the emergence of new business models and products based on the blockchain. According to “Banking on Blockchain” by Accenture, banks could save $8 billion of their $30 billion in spending by implementing blockchain.

Blockchain technology in banking

Blockchain and banking are just the beginning. From a macroeconomic perspective, banks serve as important storehouses and value transfer centers. As digitized, secure, and tamper-resistant ledgers, blockchains can perform the same function, enabling greater accuracy and information sharing across the financial services ecosystem.

Blockchain has the potential to seriously compete with the multi-trillion dollar traditional banking industry by getting rid of key intermediary services that banks are, from payments to clearing and settlement systems.

Cross-border B2B transactions alone are expected to reach a total value of $35 trillion in 2022, according to Juniper Research. However, blockchain technology offers a secure and cheap way to send payments, which reduces the need for third-party verification and reduces the processing time of traditional bank transfers. Thus, the number of cross-border B2B payments on the blockchain will grow to almost 1.8 billion by 2025, compared to 122 million in 2020.

Implementation of smart contracts in banking

The smart contract is programmed with the conditions introduced by the parties to the agreement, and then executes the terms of this agreement automatically immediately after the terms and conditions of this contract are met. The contract is self-sustaining, with no need to contact a third party.

By adding a smart contract to the banking industry, it becomes possible to decentralize many of the most commonly used functions of trusted financial intermediaries. With the help of smart contracts in the banking sector, the following operations can be performed:

  • money transfers automation;
  • lending decisions;
  • credit service;
  • insurance;
  • making a will;
  • issue of securities and more.

In addition, the clearing and settlement process, in which all payments and transactions are reconciled and verified, is associated with high administrative costs. They are completely eliminated if the agreements are carried out autonomously on the blockchain.

Top 3 benefits of blockchain for the banking industry

Blockchain technology can bring the following main benefits to the banking industry:

  1. Fast and cheap transfers

    This is especially true for cross-border transfers and micropayments, where bank fees can be comparable to the transfer amount. While in banks, such transactions take a long time (up to 3-5 business days) and are expensive (from 1% of the amount). On a global scale, this is a huge expense. In the blockchain, transfers take several minutes and are significantly cheaper.

  2. Reduce costs through automation

    Blockchain makes it possible to get rid of complex workflow because any operation can be tracked. The guarantor of the immutability of the data is the technology itself, where the human factor is completely excluded. This will reduce costs and reduce staffing.

  3. Transactions immutability

    With the implementation of the blockchain, the possibility of making changes retroactively and falsifying reporting is excluded. The banking system is not transparent. Blockchain will make all operations transparent and increase the level of trust between all participants.

Use cases of blockchain technology in the banking sector

Let's dive into the use cases for blockchain technology in the banking sector.


  • fast and secure transfers;
  • higher level of security when transferring money;
  • real-time operating;
  • affordable and fast cross-border payments.


SWIFT is a system of worldwide interbank financial communication channels that unites more than 11,000 banks and other financial institutions. The more users are connected to it, the more noticeable its shortcomings are low transaction processing speed and weak database protection. The system is often criticized for insufficient protection of customer data; in addition, the payment processing time is up to 5 days.

Transactions in blockchain networks are much faster and cheaper, and the SWIFT system already has competitors. One of the first was the Ripple blockchain platform, created specifically for working in the banking sector. Its principle of operation is similar to the principle of SWIFT, the main difference is decentralization. Blockchain technology makes payments much faster and cheaper.

P2P payments

The introduction of blockchain technology for P2P payments has brought a significant transformation by replacing cash, credit cards, vouchers, checks, and gift cards with digital wallets. Mobile app developers are looking to harness the power of blockchain technology to build trusted and exceptionally secure P2P blockchain applications in finance.

KYC and ID verification

KYC includes many checks ranging from financial status to various personal details. The introduction of blockchain technology allows banks to forgo these tedious step-by-step verifications by registering once on the blockchain and avoiding re-verification for other services if they also use this distributed ledger technology.

Thanks to the blockchain, customer databases can automatically update with actual information and ensure secure data exchange between banks and other financial institutions.


In trading, most of the trading activity is still carried out on documents such as letters of credit, bills of exchange, invoices, etc. Thanks to the blockchain, this traditional trading process will be digitized, reducing the time spent on the manual process, bureaucracy and paperwork.

The introduction of blockchain technology in trading brings:

  • real-time update;
  • alternative markets;
  • fast and convenient transactions;
  • transparent transaction accounting.

Future prospects for blockchain in the banking sector

At the World Economic Forum, blockchain was identified as one of the global trends of the next decade. It can affect many processes in the commercial, government, and financial sectors. Blockchain is already impacting business and society in the long term. Now the technology is young, but many companies are already changing business processes, focusing on implementing the blockchain.

We have yet to see how banks can implement blockchain into their existing system. However, the number of banks using blockchain will increase, and those who stay away from digital transformation risk destroying any business that hasn't opened its doors to innovation.

Sep 14,2022 ● 10 min read

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