The way forward for Financial Services
The simplicity of making financial transactions and financial services generally, had first been revolutionised when telegraph companies introduced wire transfers. However with the approaching of recent age financial services like Bitcoin and Ripple, it’s the time we address the issue of the items the long run holds for that financial services around the globe.
Traditional Wire Transfers
Let’s start by first considering how everything has been happening of these past 150 years since wire transfers were first introduced. Transferring funds utilizing a wire transfer method using a bank isn’t a single step process however a multi-step process. It is just like this:
The sender approaches their bank and orders the change in funds for an account. Unique codes like BIC and IBAN codes are supplied towards the bank through the sender so the bank knows wherever the funds have to be transferred.
The sender’s bank contacts the receiver’s bank by delivering a note through an alarm system, for example Fedwire or Quick, signalling it that the transfer must be made. The receiver’s bank receives this message, including settlement instructions too, after which asks the sender’s bank to transfer the quantity specified by the content.
The sender’s bank now transfers the quantity. This isn’t done all at once but piece by piece, so it will take between a couple of hrs to a few days for the whole sum to become transferred.
To help make the transfer, the 2 banks should have a reciprocal account with each other. If that’s and not the situation, the transfer is created via a correspondent bank that holds this kind of account.
As you can easily see, this type of transfer relies excessively on the mediator, takes additional time of computer should, and can be pricey because the banks charge some fee for his or her service. Distributed currencies like Bitcoin provide an affordable solution for this process.