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Narrator: "Blockchain Revolutionizes FinTech. Traditionally, businesses managed their finances using paper ledgers. But today, businesses are adopting technology to improve their financial activities. This integration of technology to support or enable financial services is termed as financial technology or FinTech. FinTech is working with Blockchain technology, which is used to develop new applications that address complex financial issues."
The visual displays the content spoken by the narrator along with corresponding animations or images with the specific terms. As the narrator discusses the management of finances by businesses using paper ledgers, the visual transitions to showcase an A-four size paper clipped on a board, symbolizing traditional financial record-keeping. On the right, a calculator is displayed, with an animated girl sitting on it, representing manual financial calculations. The visual then changes to present a digital screen showing various financial elements, including a stock market chart, bar graph, and currency icons. As the narrator continues, relevant text appears on the screen, reinforcing the information being discussed. When the narrator speaks about the working of FinTech with blockchain technology, the visual displays nine icons distributed in three rows and three columns. The icons in the rows are as follows: Row one: an icon shows a house, an icon of a group of people, an icon of a lock.
Row two: an icon shows a gradually increasing vertical bar graph, an icon of shaking hands, and an icon shows a thumb impression.
Row three: an icon shows a dollar symbol, an icon shows a stack of coins, and an icon shows a cloud.
Narrator: "A blockchain is an ever-growing public ledger of information, run on a network. Similar to a database, a blockchain can record and store any kind of information in the form of connected blocks that are cryptographically linked to one another, forming a chain. New blocks are added to the network based on the specific protocols established by the creator of the Blockchain. So, what are the key features and benefits of blockchain technology? A blockchain is a permanent record of transactions. Once a block is added, it cannot be deleted or altered. This ensures a high level of trust and creates true digital assets. Another feature is that a blockchain uses encrypted distributed ledgers technology, which provides trusted real-time verification of transactions. Blockchains also ensure better transparency and traceability through smart contracts, which are computer code that automate the transfer of cryptocurrencies only when coded preconditions are satisfied. Additionally, a blockchain is based on group consensus. This means that a transaction can take place only if all the parties involved approve. This helps verify the particulars of a transaction. Finally, with blockchain, fewer third parties are required. In fact, a blockchain eliminates middlemen and their commissions, and establishes trust and reliance between the parties directly involved in a transaction."
The visual displays the content spoken by the narrator along with corresponding animations or images with the specific terms. The blockchain is represented by a block with numbers on it and it is located in the center connected by chains from all its four edges. The key features and benefits of blockchain technology are displayed as follows:
Narrator: "Let's look at some of the important applications of blockchain in FinTech. In supply chain financing and management, blockchain technology provides a single source for creditworthiness, supplier inventory levels, purchase order receipts and approvals, and other checks. Blockchains also ensure secure payment options. International payments often take a week or more to be realized by banks and typically involve hefty transfer fees. A blockchain helps provide fast, reliable, transparent, secure, low-cost, and error-free transfer of money locally and internationally. A blockchain allows the FinTech industry to use smart contracts and thus minimizes the occurrence of fraudulent transactions. Blockchain technology also helps in better record storage and management as it enables authentication devices to be embedded into documents. This protects the documents against tampering. Finally, blockchain technology helps stock exchanges to eliminate operational bottlenecks in the purchase and sale of stocks. These bottlenecks include regulatory approval and mandatory clearances as well as commissions and fees charged to customers."
The visual displays the content spoken by the narrator along with corresponding animations or images with the specific terms. The supply chain financing and management is represented by an illustration showing some trucks at the gate of a warehouse, and a crane lifting a load from the stack of loads. The secure payment options are represented by an illustration showing a smartphone with a lock displayed on its screen and surrounded by a dollar symbol, two setting icons, an envelope, and a girl sitting adjacent to the smartphone. While the narrator speaks about minimizing the fraudulent transactions by the blockchain, the visual displays a magnifier hovering over the text FRAUD, and the text below it reads, "Fraud detection." The record storage and management is represented by an illustration showing files arranged in racks in the back, while paper ledgers and a person with a magnifier in the foreground represent meticulous record-keeping. Stock exchanges are represented with a bear and bull facing each other, labeled "SELL" and "BUY" respectively. A laptop screen in the background shows a live stock chart, adding relevance to the concept.
Narrator: "Let’s look at an example to see how companies are using blockchain technology to improve financial services. One such company is Square, a market leader in point-of-sale devices. Square’s cryptocurrency payments network is built on a private blockchain network that records transactions in real-time. Square’s point-of-sale system allows these cryptocurrency transactions to be processed as quickly as credit card transactions, thereby eliminating the intrinsic latency in these transactions."
While the narrator speaks about the company square, the visual displays an illustration showing a desktop with a screen adjacent to it displaying the amount. A machine with keys used to swipe the card is also displayed adjacent to the desktop. The visual shows the details about the company Square on the left. The details are as follows:
Square
Founded: two thousand and nineFounders: Jack Dorsey, (Co-founder and former CEO of Twitter) and Jim Mckelvey
Below it, the visual displays the following points about Square's cryptocurrency payments network:
Narrator: "While the benefits and applications of blockchain technology are many, there are also some challenges. At present, there is no universal standard for a blockchain. For blockchains to be used more universally, all blockchain networks need to use the same language. Privacy and security are concerns too. Since blockchain is an open access platform supporting public information, protecting privacy and ensuring security can sometimes be a challenge. Lack of regulation is another challenge. Some countries have attempted to regulate blockchain networks with only moderate success. Some countries have banned cryptocurrencies such as Bitcoin and Ethereum, while others have embraced cryptocurrency-based transactions. Another issue is that cryptocurrencies slow down the speed of transaction processing on blockchain networks. This affects scalability adversely. Finally, the demand for blockchain experts and developers has increased significantly. As blockchain technology achieves greater market penetration, the shortage of expertise will need to be addressed. Blockchain technology is revolutionizing the FinTech industry, establishing trust between parties, eliminating middlemen fees, and expediting transaction processing. Even though there are some challenges, the versatility of blockchain technology has gained significant interest among businesses around the world."
The visual showcases a curve line with various challenges of blockchain technology marked on it from left to right: Challenge one: Lack of standardization: Difficult for all parties in a transaction to understand and fully participate. Challenge Two: Privacy and security: Need for better measures, particularly with evolving technology and growing number of users. Challenge Three: Lack of regulation: No consistency in regulations across countries. Challenge Four: Scalability: Need for increase in transaction throughput. Challenge Five: Scalability: Requirement for more experts and developers. Copyright information for each image in the video: Copyright © The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
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Described transcript ©2023 McGraw Hill. All rights reserved. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.
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