Blockchain in Fintech: Use Cases and Future

Blockchain has transformed how businesses secure their transactions. But, its benefits go beyond it and have impacted all industries, especially fintech. Blockchain has helped fintech industries reduce costs, automate operations, and ensure transparent transactions globally. 

More than a passing trend, blockchain has become the need for the evolving fintech landscape. To make an impact in the fintech or banking domain, you must learn-

 How blockchain reshapes the fintech industry.

• How a blockchain-based approach can solve existing fintech challenges and improve workflows. 
• Real-world use cases of Blockchain-based fintech enterprises
• How a Blockchain-based solution development company can help you make an impact.

But, first, we will understand how blockchain fits into the fintech industry.

How Blockchain Technology Revolutionizes the Fintech Industry?

“Blockchain in Finance” means using blockchain technology that can elevate the finance and banking experiences for all. It can improve security and efficiency in financial services.

This has led to the growth of decentralized finance (DeFi), a new system that removes middlemen by using smart contracts for direct transactions between people.

• The global market for blockchain in fintech is $4.26 billion in 2024 and might grow to $50.7 billion by 2030. 
• Meanwhile, the DeFi market is $30.17 billion in 2024 which will grow to $123.61 billion by 2028.

45% of financial intermediaries experience economic crimes, and Blockchain technology could solve many of these challenges. 

The fintech blockchain market is growing rapidly with major players like Oracle, AWS, and Alphapoint setting the benchmark for the industry.

But, what is driving this swift change and accelerated growth of blockchain in fintech?

• Capitalization of cryptocurrencies and ICOs
• Growing demand for distributed ledger technology
• Implementation of advanced blockchain features for more streamlined finances
• The need for faster and safer financial transactions
• Use of cryptocurrencies and digital tokens as payments
• Stablecoin as a DeFi protocol for cost-efficient financial solutions

DeFi Market Overview

The adoption of blockchain in fintech is huge. The same goes for the increasing DeFi (Decentralized finances) market. Here are some factors that drive the DeFI market.

• The need for advanced decentralized financial services
• Continuous development of DeFi applications
• The growing usage of cryptocurrency within the financial market
• Blockchain’s capability to build new financial systems that are safe, secure, and reliable.
• The emergence of new DeFi platforms and protocols
• The growing demand for decentralized and trading platforms. 

Blockchain has completely changed how people handle their finances with great security and control. 

Also read- Blockchain in Modern Industries: How Is Blockchain Reshaping?

The DeFi market is expected to grow, and so are the challenges like regulatory uncertainty and security issues that need to be handled.

Blockchain came as a significant technology that bridged the gap in traditional financial services. 

How Blockchain Solves Key Challenges in the Fintech Industry?

Traditional financial systems are not perfect, giving rise to several challenges. While some technology has solved many problems, it has also introduced new issues.

Thus, businesses and the fintech industry need modern solutions that can solve every challenge all at once.

Blockchain in finance has great potential and can help solve many of these problems. Let’s see how.

1. High Operational Costs

Blockchain can help reduce transaction costs in the fintech industry.

In traditional systems, a simple credit card payment involves multiple parties- merchant, bank, and card network, that incur fees for making the transaction.

This fee increased multiple times with cross-border payments, making it difficult for normal people. 

Blockchain solves this problem. It uses peer-to-peer transactions and decentralized protocols that eliminate middlemen that speed up processing times and lower costs.

2. Limited Service Availability

Accessing fintech services can be limited due to regulations, technical limitations, or a lack of physical branches or support staff, especially online.

Today, when everyone wants everything at their fingertips, managing finances is not an exception. With the rise in mobile apps, the demand for online financial applications is growing.  

But, thanks to Blockchain it removes these restrictions, making finances available for everyone, at any time. Thus, businesses seek to develop trading apps like Coinbase to enter the fastest-growing fintech market. 

3. Security Risks

A big challenge in fintech is keeping data safe while protecting customer privacy. Amid rising cyber crimes, building robust financial systems, and applications is necessary.

In 2022, there were 1,829 reported incidents. Thus, businesses must take prior action and integrate technology to secure digital assets and sensitive data. 

Blockchain helps reduce cybersecurity risks and fraud with three key features:

• Decentralization: as we know Blockchain is decentralized, meaning there’s no single point of attack. Each transaction is closely checked and confirmed within the network.
• Encryption: Blockchain encrypts each transaction using public and private keys and then adds them to the chain of blocks.
• Immutability: it means, that once the transactions are added to the blockchain, no one can change them without the agreement of other nodes. 

By adding blockchain, fintech industries can enhance their security posture and reduce the risk of cyber attacks.

4. Lack of visibility 

In traditional financial systems, it’s hard to trace and verify transactions because multiple intermediaries are involved. These systems are also centralized, which can create transparency issues and more chances for tampering.

Blockchain solves this problem by using a decentralized, public ledger that makes tracking transactions easy. With its advanced algorithms, every transaction is recorded and verified.

This means users can check any transaction, and auditors can easily verify activities on the network.

5. Slow and time-taking settlement process

In traditional fintech systems, transactions can take hours or even days to settle because of manual processing and the involvement of multiple intermediaries.

Blockchain speeds things up by simplifying the process. It reduces the time needed to process and confirm payments, making verification quicker and reducing settlement times.

For customers, this means faster and cheaper financial transactions. Banks can also process payments almost instantly and save on costs related to multiple departments and expensive systems.

Also read- How Much Does Blockchain App Development Cost: A Detailed Overview?

In short, blockchain enables fast, secure financial transactions, making it a great solution for the challenges in the financial industry.

Now, let’s look at ways blockchain-driven decentralized finance is evolving.

7 Powerful Use Cases: How Blockchain is Transforming the Fintech Industry?

In recent years, we have seen businesses taking the initiative to improve the existing fintech landscape by integrating the latest technologies, including blockchain. Here are some ways that blockchain has impacted the fintech industry.

Let’s understand.

1. Digital payments

The cryptocurrencies craze is increasing. People of all ages are now investing in crypto to earn rewards and make passive income. 

To make the transactions safe and secure, they all rely on crypto payment apps.

With the increasing market of crypto payment apps and platforms, businesses will be integrating blockchain to provide services like- securities settlement, tokenized fiat, stablecoins, and crypto trading, with cross-border payments with lower gas fees. 

Blockchain-based digital payment systems also provide enhanced security through encryption, reducing the risk of fraud and chargebacks. This is particularly valuable in global remittances and micropayments.

For example- Stablecoins use blockchain to provide a stable digital currency for digital payments. PayPal has integrated blockchain for crypto payments and conversions within its platform for seamless digital payments.

Also read- Crypto Wallet App Development Cost: How It Can Be Reduced?

2. Trading with DeFi

DeFi has changed trading and is beyond centralized exchanges. Thus, giving rise to decentralized exchanges (DEXs) that use smart contracts for direct peer-to-peer trading, without intermediaries.

It uses advanced algorithms that keep pricing fair depending on the supply and demand of the assets.

Businesses use DeFi in trading-

• Decentralized Exchanges (DEXs): these are advanced blockchain-based platforms that enable peer-to-peer transactions, without a middleman. Everything is secure, and clear, that you do not need anyone’s permission to trade.
• Decentralized Derivatives: DeFi also lets users trade financial products like options or futures using smart contracts. It means people can trade even more complex things without needing traditional brokers.
• Decentralized Margin Trading: With DeFi, more people can borrow money to trade assets (known as margin trading). Not only this, the users who lend their money will also earn interest.

Uniswap is a popular DEX where users use their Ethereum wallets to trade directly with others. They do not need any traditional exchange like Coinbase for this.

3. Digital Identitiy Management 

Verifying identity has been a crucial challenge, where identity thefts have become prevalent. This is why, the fintech companies follow “Know Your Customers” (KYC) rules to verify the legitimacy of their customers and their transactions. 

Using Blockchain, businesses can build decentralized digital identity solutions that helps users to control and share data. Users can create cryptographically secured digital identities stored on a distributed ledger.

Businesses can use these identities for secure authentication and verification without relying on centralized authorities.

For example- Civic is a blockchain-based identity verification platform where users can control their personal information. With blockchain’s decentralized structure, Civic reduces the risks of traditional and centralized systems.

4. Lending

Traditional lending took 30 to 90 days for loans. But, DeFi has made the process much faster, approving loans in less than 48 hours. All thanks to advanced algorithms that speed up the work.

Crypto lending is a growing market within the fintech space. It has increased the crypto lending platforms market that allows users to earn interest on their lending assets or access loans using crypto as collateral. 

Crypto lending platforms enable transparent and secure agreements between lenders and borrowers. Businesses can use smart contracts to automate the terms of loans, interest rates, and collateral, without any third party.

For example- Aave is a popular decentralized lending platform, Earning $24 Million in Monthly Fees that allows-

• Users borrow and lend cryptocurrencies. 
• Collateralize their assets (like Ethereum or Bitcoin) 
• Take out loans in stablecoins or other digital currencies
• Earn interest on their deposits or pay it on their borrowings

All without any traditional financial intermediaries.

Not only this, the fintech blockchain also enables P2P lending, allowing investors to lend directly to borrowers without intermediaries. 

5. Asset Management with Blockchain

The fintech industry is under pressure to manage risks, make quick decisions, and implement the latest regulations. With growing assets, it becomes more challenging to manage them.

This is why, they leverage blockchain-based asset management products. 

Blockchain fintech solutions can simplify the following for stakeholders- 

• Automating fund management
• Connecting stakeholders through digital assets and services
• Digitizing portfolios for easier market access and liquidity
• Adding privacy settings to transactions for better security
• Automating voting rights and shareholder roles into digital assets, reducing human errors.

Bankex is a good example of how blockchain is used in asset management. They offer solutions that bring together traditional financial markets and blockchain.

They tokenize real-world assets like real estate, commodities, and securities so that people can own smaller shares of these assets and increase liquidity.

6. Streamlined auditing process for regulatory compliance 

Traditional auditing is complex and time-consuming. It requires manual work to verify each financial record, leading to errors.

Blockchain offers a transparent and immutable ledger that tracks and verifies each transaction, creating a permanent, transparent record.

Auditors can access these records in real time, automate the auditing process, and reduce the time and costs traditionally associated with manual auditing procedures.

KPMG uses blockchain to audit financial transactions in real-time. They have streamlined the verification and auditing process, reducing significant costs.

7. New crowdfunding models 

With the rise in startups, the global crowdfunding market is growing. They need a decentralized way to raise capital. 

Blockchain introduces smart crowdfunding models like 

• Initial Coin Offerings (ICOs) 
• Initial Exchange Offerings (IEOs) 

for startups to raise capital in a decentralized manner. These models are transparent, accessible, and efficient to investors and startups. 

Blockchain creates tokens that represent shares in a project or company. Investors can purchase these tokens using cryptocurrency or fiat, without any intermediaries.

This democratizes access to investment opportunities, allowing a global pool of investors to participate.

Implementing blockchain across the fintech workflow has improved security and efficiency while reducing costs. Explore blockchain benefits in the fintech landscape.

Top Benefits of Blockchain Technology in Fintech Solutions

From transparent transactions to improved security, blockchain has transformed the fintech industry for good. Many financial companies are using blockchain for better management and security.

• Easy restoring of lost data- A DeFi network is spread across multiple devices, called nodes, which each hold a copy of the entire ledger. This makes it possible for companies to recover their blockchain network if something goes wrong, like database corruption, a server crash, or a ransomware attack.
• Reduces costs- blockchain removes intermediaries, and fintech companies can save significant costs. Blockchain can reduce 80% of remittance costs. Despite gas fees, integrating blockchain is still a cost-efficient solution to traditional financial systems.
• Automated processes- with the introduction of smart contracts (self-executing contracts) based on rules can automate several legal processes, loan approvals, payments, and more reducing human efforts and errors. 
• Lowers settlement time- blockchain and DeFi has significantly reduced the settlement time to seconds, which would take 3-4 working days in traditional systems. 
• Improved reach- blockchain has open borders for payments, allowing seamless and secure cross-border payments in seconds. 
• Data uniformity- blockchain has consensus protocols and smart contacts that ensure all the transactions adhere to the same rules, ensuring data uniformity. 

The benefits of blockchain do not end here. It has more potential to take the fintech market to the next level with different technological integrations.

7 Tech Trends in the Fintech Industry to Look in 2025

Here are some trends in the evolving fintech industry that every business must consider. 

1. AI and Machine Learning

AI and ML are transforming fintech by automating tasks, improving risk management, and offering personalized services. AI-powered chatbots provide 24/7 customer support, while machine learning helps detect fraud and predict market trends.

2. Internet of Things (IoT)

IoT is expanding into financial services, with connected devices like smartwatches and home devices enabling seamless payments, real-time transaction monitoring, and personalized offers.

IoT also helps insurers assess risks and improve customer engagement. Some of the examples of IoT in fintech are-

• Smart ATMs
• Wearable payment devices
• Connected insurances
• Smart POS systems
• Smart home banking

3. Quantum Computing

Quantum computing holds potential for fintech, enabling faster and more complex calculations, optimizing portfolios, and improving risk analysis.

While still in its early stages, quantum computing could eventually revolutionize fraud detection and algorithmic trading.

IBM points out that quantum computing could improve several areas in finance, such as:

• Optimizing trades
• Better risk profiling
• Making accurate predictions
• Offering personalized product recommendations
• Managing investment portfolios
• Improving credit scoring
• Detecting fraud
• Helping with anti-money laundering
• Forecasting financial crises

Real-world use cases-

• HSBC is working with Quantinuum to use quantum computing to improve cybersecurity in financial services.
• Credit Mutuel has teamed up with IBM to explore how quantum computing can help strengthen fraud detection.

4. Blockchain and Distributed Ledger Technology (DLT)

Blockchain ensures secure, transparent, and efficient transactions, particularly in areas like payments, remittances, and cross-border transactions.

Smart contracts built on blockchain can automate agreements, cutting out intermediaries and reducing costs.

5. Insurtech

Insurtech leverages emerging technologies like AI, blockchain, and IoT to improve insurance operations, offering more personalized products, faster claims processing, and better risk assessment, transforming traditional insurance practices.

6. Embedded Finance

Embedded finance integrates financial services directly into non-financial platforms, providing customers with seamless access to financial products. This trend helps businesses enhance customer value and create new revenue streams.

7. Open Banking

Open banking allows customers to securely share their financial data with third-party providers through APIs.

This fosters competition and innovation in the financial sector, giving consumers more control over their data and access to personalized services.

The Global open banking payment transactions will grow from $57 billion in 2023 to over $330 billion by 2027.

These trends are not very new while some trends can be seen in the future. To stay ahead in the growing fintech industry, businesses must focus on integrating technologies. 

Why Choose OnGraph for Blockchain-Based Fintech Solutions?

As a leading blockchain app development company, OnGraph is making strides in the fintech industry with its indispensable smart solutions. We have created ROVI, a DApp for Web3 mass distribution.

It is an entire network that covers the ROVI wallet, rewards utility app, keyword, and pay app that has made it easier for customers to manage their trades at their fingertips.

Not only this, our customers have earned more than $10k rewards by just playing 20+ mini-games. From end-to-end security to integrity, our blockchain experts have delivered 10+ successful projects.

We aim to provide better financial opportunities for everyone with our scalable solutions. 

To help your fintech business excel in this competitive market, we have a broad range of services. Connect with us for more smart blockchain solutions.