How Can Blockchain Improve Financial Sector in MENA
It is evident that the blockchain is a technological improvement which has an overreaching implications that will change the financial services as well as many other businesses and industries including the MENA region. In MENA region, there is significant alternatives in the degree of financial growth where certain countries are equitably more advanced and some have more room for growth. The region seems to performs satisfactorily on the supervision, regulation and financial openness themes compared to most other developing country regions.
There are some big challenges in the financial services industry such as; gathering payments for goods and services as well as transferring money to different countries or different banks are time consuming; the more time and money it takes when opening a new bank account as well as all the additional workflows which is related to account registration and payment processing; the centralised banking services rely on centralised architecture; business partnerships with international banks bring more risk and loss of trust.
The blockchain technology provides many benefits to the financial sector in general as well as in the MENA region. The efficiency is one of the most significant benefit which the blockchain provides in terms of supporting a ledger; when the blockchain forms a web that duplicates the whole ledger to members, thus the advancement of traditional agreement to synchronise and guarantee financial transaction will not be compulsory. Furthermore, redeeming information using blockchain solutions will also enhance the functioning of data sharing into various servers. On the other hand, the blockchain solutions will also present scalability as it can resolve thousands of transactions per second where for instance the VISA payment system only processes an average of 2000 transactions per second. Even though it seems like the blockchain technology would not be protected enough, it surprisingly provides the basis built-in mechanism in order to preserve fixed data records, transactions signed with nonpublic keys and preserves the data throughout the whole network. Hence, there will be a framework for creating entrusted and secure applications.
As a result, the blockchain technology guarantees a more effective, secure and absolute scalable banking transaction which the present banking model being used will be able to change the way the financial sector approaches the activity of assets and validation of contracts in the MENA region. Furthermore, it will be easier for the MENA region to apply certain changes and improvement in the financial sector and legislations compared to the developed countries and could potentially be stronger if adopted earlier.