Introduction
As we are in the digital era where everything is actually controlled digitally, we can say that financial institutions is beginning to reap the effect and profit of technology Advancements and this is something beautiful to see. But even with the fact that the financial institution have been able to grow massively, there is still a current challenge that the financial institution is facing and that is cyber threats or what I will call the cyber attacks. Even though the traditional cyber security have to an extent try to settle the issue, but I believe it is still leaving a space and a hole.
But like I said earlier, daily the world of technology keeps advancing and that advancement brings what I call the Blockchain technology. The Blockchain technology which started as just a cryptocurrency but now have evolved over the years to be much more beyond the crypto space but a strong tool that have over the years help to enhance cyber security which the financial institution currently now is in die need of.
Understanding Blockchain Technology
Over the years, Blockchain technology have been able to gain massive adoption as it does not need any introduction as it was before. Blockchain operating using the Decentralised nature have been able to store data across different nodes. Every transaction on the Blockchain space is recorded and carefully stored to the point that it cannot be altered.
There are a lot of features I have actually come to discover over the years that make Blockchain technology to stand out and which are the immutability attribute. Immutability in the aspect that every data cannot be altered. We also have the transparency, the Decentralisation. All these unique features that the Blockchain technology possesses make it to stand out and gain massive adoption in the digital era we are in right now.
Enhanced Data Security and Integrity
One of the strong impact that the Blockchain technology helps for the financial institution is the fact that it helps to enhance data security and integrity also. What do I mean by that, every transactions that is carried out or stored on the Blockchain are encrypted and this encryption helps to modified data and make it difficult for those data to be altered. It is called the immutability attributes of the Blockchain technology which I make mention of.
This immutability feature allow it to be difficult for any data or transactions recorded on the chain to be altered or manipulated. This makes data to remain intact and this also helps financial institutions data to be protected from data manipulations and hacking. Most of the times financial institutions always need to deal with huge data and that is why they need their data to be secured. With the immutability nature of Blockchain, it prevents those data from being breached.
Reduced Single Points of Failure
The traditional cyber security even though helps to tackle some cyber attacks and threats, but it is still not enough as it's have it's own drawback and one of the major drawback is the fact that it works on the foundation of centralised databases and these types of centralised database can be compromised and easily hacked by hackers. But with the Blockchain been Decentralised in nature, there is nothing like that because it makes it more difficult for hackers to hack.
What do I mean by the Decentralised nature? It makes it work in a way that data that is recorded on the Blockchain find it hard to be compromised because they are distributed across multiple nodes within the Blockchain network. So take for example as an cyber criminals, you will need to have access or hack majority of those nodes before you can get full access to the data on the Blockchain network which most of the time it is always difficult to do. With the Decentralised nature, it helps to enhance the cyber security and helps to reduce the risk of downtime that is mostly tied to the centralised failures. This gives a massive edge for the financial institution in the aspect of the security of their data.
Improved Identity Management and Fraud Prevention
Lastly I will like to talk about before rounding up for today is that the Blockchain technology helps to improve identity management and fraud prevention which is also very important. Recently now in the digital world, one of the constant issues is the identity theft as it looks like it is getting more often and often every single day and that is what the Blockchain technology helps to solve. Blockchain technology comes with a lot of solutions for the identity management and this helps to manage your digital identity effectively in a Decentralised way and eliminating the centralised authority.
What do I mean by that? With the Blockchain technology, you are able to make use of the Blockchain technology to create good digital identity that will help create transparent transactions and this transparent transactions will make it difficult for the fraudulent activities to easily be noticed at the early stage. This makes the financial institution easy to monitor every transaction carried out and been able to detect early any suspicious activities and be able to deal with it in potential fraud or cyber criminals activities.
Conclusion
So many opportunities that the Blockchain technology helps to offer and I am so sure this is just the beginning. The Blockchain technology is helping to transform the cyber security around in the digital world and most especially in the financial sector. With that attributes that the Blockchain technology possesses, it helps provide solutions to those cyber security challenges that the financial sector is currently facing and making the financial world a more safer place to be for investments.