There are many benefits of digitalization for every sector, especially the financial one and cryptocurrency are helping to pave the way.
We can expect to see these digitalization benefits in the world of cryptocurrency in the coming years.
As our world moves towards full digitalization, more economic processes are being carried out with the help of digital technologies leading to full automation to help optimize these processes. As digitalization processes become more and more essential to keep up with our highly digitalized world, cryptocurrencies are accelerating the role of digitalization in banking. The digitalization benefits we are beginning to see are many, especially for the financial industry as digitalization helps regulate the cash economy and ensures more secure, easier transactions.
What is Digitalization?
Digitalization is the conversion of data into a digital format with the adoption of technology allowing for many digitalization benefits in the financial industry. When financial services companies embrace digitalization, they can easily enhance their customer service efforts by providing them with increased convenience and reducing human error which builds better customer loyalty.
What is Cryptocurrency?
Cryptocurrencies are digital currencies that are created and managed through advanced encryption techniques known as cryptography. While many once suspected that cryptocurrencies were a passing fad, the digitalization benefits they offer ensure that they are here to stay for a long time.
Cryptocurrencies are a huge game changer to the digitalization process. Since e-commerce is driven through POS machines and online payments, digitalization is driving the cost of these actions down, benefitting e-commerce companies. Cryptocurrencies add to the benefits of digitalization by allowing small business owners to bypass third-party fees and make more profits.
Cryptocurrencies open up huge opportunities for investors by turning the world into a global stock exchange allowing assets to flow more freely from owner to owner, regardless of borders. Since cryptocurrencies are powered by blockchain, they allow for more secure transfers and lead to less record tampering. Digitalization benefits don’t only apply to financial institutions allowing them to gain better control of finances but for individuals as well, allowing them to guarantee the security of their finances and transactions.
People today have round-the-clock access to their bank’s thanks to online banking. The role of digitalization in banking, thanks to cryptocurrencies, has allowed consumers to manage large amounts of money more easily and has facilitated cashless transactions. With cryptocurrencies, consumers no longer need to carry physical cash around because digitalization now allows people to make payments right from their mobile device.
Our world is becoming more and more economically unstable making cryptocurrencies more and more essential. One of the benefits of digitalization and cryptocurrencies is fraud prevention. Since cryptocurrencies are digital and can’t be counterfeited, companies can better verify the identity of new customers wanting to open an account and prevent fraudulent users attempting to launder money or finance global cybercrime. Cryptocurrencies can also accurately detect anomalies in payment transactions that might indicate a fraudulent account takeover and even identity spoofing in real time.
Identity Theft Prevention
Another one of the great digitalization benefits cryptocurrencies bring to the digitalization process is their ability to prevent identity theft, unlike traditional credit cards. While credit cards operate on a pull basis, meaning they initiate a payment and pull the money from a user’s account, cryptocurrencies operate on a push basis allowing the customer to send the exact amount they want to the recipient.
The role of digitalization in banking is making way for lower fees thanks to cryptocurrencies. Since cryptocurrencies like bitcoin operate on the blockchain ledger, they bypass third parties and their subsequent fees. Cryptocurrencies make it possible to pay recipients directly, eliminating third-party processing fees and allowing consumers to save money in the process.
Cryptocurrencies are offering many digitalization benefits for the financial sector and helping them revamp their digitalization efforts. As the digitalization process for financial services organizations continues to reflect the needs of our highly-digitalized world, we are bound to see many more benefits of digitalization and cryptocurrencies alike.