How Ripple Targets To Revolutionize the Banking Sector

By April 25, 2018 No Comments

With financial transactions becoming a technological process in many countries, we can’t even wait for a second to transfer money from one point to another. But the old school digital banking system isn’t helping to make things lightning fast.
If we talk about the benefit of banking and finance industry from blockchain perspective, the one name that universally comes to mind is Ripple, which has created an all new option for the sector. Ripple has smartly leveraged the power of blockchain technology to send money anywhere around the globe in a safe and secure manner within micro seconds.
It was conceived as a solution for lethargic banking system, Ripple has skyrocketed to the fourth most valued cryptocurrencies of the world next to Bitcoin, ethereum and bitcoin cash with a whopping market cap of $46 billion. Ripple’s CEO Brad Garlinghouse recently talked about its massive growth:
“People know Ripple is the only blockchain solution for payments that is proven in the real world, and it’s driving demand from financial institutions of all kinds and sizes because they want to stay ahead of the curve.”
How it works?
Ripple is absolutely different from Bitcoin which is sold and bought on exchanges like Belfrics. Bitcoin is known as a decentralized peer to peer network which was developed to run as an alternative financial network to the current global financial system. While Ripple can be defined as a protocol developed to make existing global financial system more efficient and secure.
Ripple functions by relying on distributed ledger which verified transactions through consensus. This unique process has eliminated the requirement of the mining community and has significantly reduced infrastructure costs. The transaction only goes through after collective approval of trusted validators.
An alternative for the banking sector?
With its reliability and ability to make real-time money transactions a reality, Ripple is seen as the future of banking sector by several experts. While leading banks of the world have already joined hands to create a brand new blockchain-based digital currency to facilitate global financial transactions with much more speed and safety; some banks have already embraced the technology of Ripple. It is assisting banks in executing instant international bank transfers in a hassle-free way.
Ripple’s “Global Payments Steering Group” is an interbank blockchain group that enables global payments — the first of its kind. It empowers its member financial institutions to create and maintain payment and transaction guidelines with formalized money transfer standards above Ripple Blockchain. Ripple has enabled banks to transact directly with each other at global levels by leveraging its global financial-settlement solutions powered by blockchain. It has also reduced the cost of settlement significantly.
Ripple’s founding member banks are some of the biggest names in the world. The list includes Bank of America Merrill Lynch, Banco Santander, Royal Bank of Canada, Standard Chartered, UniCredit, and Westpac. Several other banks have joined the bandwagon making it one of the most efficient and credible options to do international money transactions.
The major advantages which Ripple can offer to banks and financial institutions are higher speed, reliability, and reduced settlement costs. Use of decentralized blockchain like ripple can help BFSI industry save billion dollars in transaction costs while enhancing speed and security of the entire system.
Till now, we have seen several ups and downs in the blockchain technology but nobody was able to create a full proof banking solution like Ripple. The major understanding till date is that cryptocurrencies are traded on exchanges like Belfrics. Ripple has truly transformed the way banks transact on the international level. It is certainly one of the most reliable blockchain technologies which would be used extensively in the future by banks and financial institutions to execute payments and transactions in real time.

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