With the rise of internet banking proving to be a success and more people choosing paperless, the development of a cashless society is imminent. Fintech Singapore has recently emerged with the proposal for the integration of BlockChain within the banking system.
Blockchain is a digital record that uses cryptography to secure transactions through decentralization.
The debate of how secure the Blockchain model is, is debatable. Overall the structure will increase security and make it harder to steal money, however with cyber attacks on the rise and major loopholes in cyber security, hacking into a blockchain system would mean a leakage of huge proportions of banking information.
However with tighter government to government collaborations between the Monetary Authority of Singapore and the Chongqing Financial Affairs office called the Chongqing connectivity initiative - which will act as a financial services pillar in Asia, modeled off of the Israeli financial security system which has been used by the swiss banks will certify the use of Blockchain as a viable banking system.
Security is improved. Paper bills, metal coins, credit cards and other forms of payment are all susceptible to theft and forgery. Blockchain makes it so much harder to steal money as the old modes of banking will be eradicated. In their place could be a gadget like watches such as the one that Garmin is developing, which is a GPS-enabled smartwatch that includes an NFC contactless payments service called Garmin Pay which supports cards from both Visa and Mastercard and enables the wearer to make secure payments from the watch, no phone, wallet or card required.
Eliminate the need for banks. You could exchange money without using a centralized server. Because it isn’t held in a single location. You don’t have to go to a bank to exchange money. It can be done via the banking app on your smartphone or smartwatch.
Blockchain saves time. Blockchain payments are almost instant, much faster than traditional payment methods as the system creates a collective network, allowing information to pass through the chain, quickly, efficiently and securely.
Blockchain lowers costs. Truly going paperless would be possible with a blockchain - this saves time as well as supplies.
Sweden is leading the way already as the first cashless society with four out of five purchases being made electronically in Sweden, according to associate professor of industrial dynamics at Sweden’s Royal Institute of Technology, Niklas Arvidsson - and going totally cash-free is the next step.
Mobile apps such a ‘Swish’ have taken off quickly with street salesmen to stores accepting and adopting the Izettle model, a cash free payment system via an app and mini card - reader. Some of the banks in Sweden have also developed a system where phone numbers allow smartphone transfers from one bank to another.
There are, obviously, concerns: cases of electronic fraud have more than doubled in the past decade and several critics – including the inventor of iZettle, Jacob de Greer – have asked whether an entirely electronic system in which every single payment is recorded is not a threat to privacy. This is something that should be closely monitored from FinTech Singaporean developers of BlockChain to make sure their system is as secure as possible.
Another issue that could be problematic is the splitting of societies with the older generation preferring to stick with cash as they are technologically disadvantaged and the younger generation demanding faster, more efficient ways of implementing banking technology.
For these social reasons, Arvidsson said, cash is not dead quite yet. “Even if, in the next few years, Swedes use almost no cash at all, going 100% cashless needs a political decision,” he said.“The idea of cash, even in Sweden, remains very strong.”
Asia should be prepared for the banking revolution and should observe closely as other societies go cashless and how it will affect their own way of banking.
The future of banking will be set to revolutionize without question. Embracing the technology and its advantages will prove a smooth transition into a more streamlined and quick way of maneuvering money around society.