Which Industries Will Blockchain Disrupt in Finance and Beyond?

Blockchain technology is transforming how transactions, contracts, and data are managed. By offering decentralized, transparent, and secure record-keeping, it reduces reliance on intermediaries, cutting costs and increasing efficiency.

Its impact extends beyond cryptocurrencies, with finance seeing the most disruption. Other industries are also adopting blockchain to streamline operations and build trust.

Banking

Blockchain is reshaping banking by making transactions faster, more secure, and cost-effective. Cross-border payments, which traditionally take days and involve high fees, can now be settled in minutes. JPMorgan’s JPM Coin allows institutional clients to transfer funds instantly, eliminating intermediaries and reducing costs.

Identity verification is also evolving. Banks must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, which require extensive documentation. Blockchain-based digital identity solutions let customers store and share credentials securely, cutting verification times from weeks to hours. IBM and HSBC have explored these solutions to reduce compliance costs.

Lending is changing as well. Traditional loan approvals rely on credit scores and manual reviews. Blockchain enables decentralized lending platforms where smart contracts assess borrower risk and execute loan agreements automatically, speeding up approvals and expanding access to credit.

Capital Markets

Blockchain is increasing transparency and efficiency in capital markets while reducing reliance on intermediaries. Securities transactions typically involve brokers, clearinghouses, and custodians, leading to delays and extra costs. Distributed ledger technology (DLT) enables real-time settlement by recording ownership and transaction history on a tamper-proof system. The Australian Securities Exchange (ASX) is replacing its CHESS clearing system with a blockchain-based platform to streamline post-trade processes.

Tokenization is making investment more accessible. By converting stocks, bonds, and other assets into digital tokens, blockchain allows for fractional ownership and greater liquidity. Platforms like tZERO and Securitize facilitate tokenized securities trading, lowering entry barriers for investors.

Smart contracts further enhance capital markets by automating compliance and financial agreements. These contracts enforce regulatory requirements, such as dividend distributions or bond payments, without manual intervention. The U.S. SEC and FINRA are evaluating how blockchain-based securities fit within existing regulations.

Insurance

Blockchain is improving how insurers manage policies, process claims, and detect fraud. Traditional insurance systems involve extensive paperwork and manual verification, leading to delays and errors. A decentralized ledger allows insurers to store and verify policyholder data securely, reducing administrative costs and speeding up claims processing.

Fraud detection is a major challenge, with false claims costing insurers billions annually. Blockchain creates an immutable record of claims history across multiple insurers, flagging inconsistencies in real time. The B3i consortium, which includes major insurers, is developing blockchain solutions to improve data sharing and fraud prevention.

Smart contracts are also changing policy management. Traditional insurance contracts require legal documentation and manual enforcement. Blockchain-based contracts execute automatically when conditions are met. In travel insurance, for example, if a flight is delayed beyond a set threshold, the system can trigger an automatic payout without requiring a claim. Parametric insurance, which pays claims based on predefined events like natural disasters, benefits from this automation by ensuring faster settlements.

Real Estate

Blockchain is making real estate transactions faster, more transparent, and less dependent on intermediaries. Property deals typically involve extensive paperwork, title searches, escrow services, and legal verifications, often taking weeks or months. By digitizing property records on a secure ledger, blockchain enables instant verification of ownership and transaction history, reducing fraud risk and simplifying due diligence. Sweden and the United Arab Emirates have explored blockchain-based land registries to improve efficiency and prevent disputes.

Tokenization is also changing real estate investment. By dividing properties into digital shares, blockchain allows investors to buy and sell fractions of real estate. Platforms like RealT and Lofty AI facilitate tokenized transactions, making high-value assets more accessible and increasing liquidity in a traditionally illiquid market.

Government Finance

Blockchain is improving transparency and efficiency in government finance. Traditional public sector financial systems rely on centralized databases vulnerable to corruption and mismanagement. Blockchain creates tamper-proof records of transactions, ensuring funds are allocated and spent as intended. Estonia and Brazil have explored blockchain-based budgeting and procurement systems to prevent fraud and improve accountability.

Tax collection is becoming more efficient. Current systems involve complex paperwork and delayed processing. Blockchain automates tax payments through smart contracts, ensuring businesses and individuals meet obligations in real time. China has implemented blockchain-based invoicing to prevent fake receipts and improve tax reporting accuracy.

Public benefits distribution is also seeing improvements. Welfare programs, pensions, and subsidies often suffer from delays and fraud. Blockchain enables direct, transparent disbursement of funds to eligible recipients, reducing administrative costs and ensuring aid reaches those in need. The United Nations has tested blockchain for distributing humanitarian aid, allowing refugees to receive financial assistance securely without traditional banking infrastructure.

Corporate Governance

Blockchain is enhancing corporate governance by improving transparency, streamlining shareholder voting, and ensuring regulatory compliance. Traditional governance structures rely on centralized record-keeping, which can lead to inefficiencies and disputes. Blockchain maintains immutable records of corporate decisions, financial disclosures, and board resolutions, reducing the risk of manipulation.

Shareholder voting is becoming more efficient. Annual general meetings (AGMs) and proxy voting often suffer from low participation and concerns over vote tampering. Blockchain-based voting systems allow shareholders to cast votes securely from anywhere. Companies like Santander and Broadridge have tested blockchain for proxy voting, improving accuracy and accessibility.

Regulatory compliance is also benefiting. Public companies must adhere to strict reporting requirements, including financial disclosures and audit trails. Blockchain enables real-time reporting by creating a permanent, auditable record of transactions and corporate actions. The U.S. SEC has explored blockchain for improving oversight and ensuring companies meet disclosure obligations.