What are the implications block chain has the financial sector?

The nature of financial intermediation of funds, surplus funds to realize the value of shortage party balance. Traditional financial system based intermediaries, financial markets, supply and demand parties to help fund value transfer, the purpose is to ease the information asymmetry between the two sides, but does not solve the problem fundamentally. Traditional financial institutions such as banks, securities, insurance company now, a large body mass, curing mode, a high degree of centralization, leading to the formation of inter-agency information barriers, reduce communication efficiency, a substantial increase in costs. The first information the Internet has brought the digital revolution gave birth to a new Internet banking system, to broaden the distribution channels funds to achieve peer exchange supply and demand side. At present sophisticated information Internet only realization of the digital transmission of information, and the block chain based on its decentralized, can not be tampered with, transparency, protection of privacy and other characteristics can build up the value of Internet value digital transmission, leading the second digital revolution, Internet banking opened a new chapter.

First, the financial impact of Internet technology and the block chain
1, the traditional financial restructuring attempts - Internet banking
Internet financial information revolution emerged in the previous 50 years, the Internet thinking applied to the traditional financial sector, simplifying the architecture, thus improving efficiencies and cost savings. The key characteristics of the Internet thinking is based on user experience-oriented, to meet user needs. The same basic user demand for traditional banking finance and the Internet, can be divided into investment, financing and payment. Invest surplus funds to meet the demand side of the economic benefits of the financing side of the shortage of funds to meet the needs to raise funds to pay to meet the needs of a broad capital flows, combined with investment, financing and payment of the financial industry to form a closed loop chain.
Financial investment and financing activities can be divided into direct and indirect financing, direct financing refers to capital supply and demand side financing to complete the process of direct face to face with the main form of bonds, stocks and so on; indirect financing means that the parties do not meet directly, and such as a bank for the media to complete the financing process through financial institutions. Direct financing through financial markets in general, common financial markets are all kinds of exchange such as stocks, futures exchange. The trusted third party intermediaries indirect financing needs, traditional financial institutions such as banks, securities and insurance companies play in the investment and financing activities, the role of financial intermediaries, in charge of information processing, risk assessment functions. Large listed companies due to legal and regulatory requirements, including the need for public disclosure of information of all kinds of assets, operations, performance, the lower the credit risk, the smaller the corresponding financing difficult. However, most small and medium enterprises, including start-ups no obligation to disclose information, financing often requires extensive due diligence, long period, high degree of difficulty, a huge cost. The same investment and financing needs of individuals due to such problems, often require a complex investigation to verify, especially involving large amounts, the user experience is poor.
This is essentially because the information asymmetry between capital supply and demand, especially the demand side of opaque financial information, credit can not be guaranteed. Information asymmetry is mainly reflected in two aspects of integrity and time difference. Internet stage of realization of the digital transmission of information, broaden the channels of information transmission, basically solved the transmission of information of the time difference, but does not completely solve the problem of complete information.
2, the Internet's development needs financial support appropriate technical
financial development and innovation of science and technology complement each other, before and after the previous industrial revolution has been accompanied by greater financial revolution. In the early 17th century, the British established a preliminary central bank and commercial banking systems, providing power for the first time the capital to promote the industrial revolution. 1860s, European and American countries began a second industrial revolution, then gradually be built in early 20th century America, bank capital and industrial capital is highly concentrated, mature investment banking system, the formation of Morgan, Rockefeller and other large consortia, support the United States after the second industrial revolution to become the number one power. 20www.abitpart.com the 1940s and 1950s, the development of computer technology, biotechnology, aerospace technology, marking the arrival of the third technological revolution. Same period in emerging venture capital in Europe and America bud, driving the information technology revolution process between the subsequent decades, the United States helped secure a place in the world.
We believe that the birth of Internet technology led to the popularity of the first digital revolution, the Internet relies on sophisticated financial information on the Internet, the rise in the late 20th century. Internet banking is the digital age of the financial system, the level of development similar to the traditional financial 18th century, currently only changed the way of expression and means of financial activities, such as e-commerce, mobile payment, the system is not yet mature. Internet finance the development needs of the advancement of technology. Block chain position is equivalent to the steam engine, the generator, the main technical support second digital revolution, but also will have a profound financial impact of the Internet's development.
Second, the specific value of the block chain in the financial sector
nature of financial intermediation of funds, the main function of traditional financial institutions are financial intermediaries, capital supply and demand side to help co-ordinate the completion of transfer of the money. Internet want to use the Internet to build up financial value distribution network, reaching to the center, to the disintermediation of purpose, and the block chain is the main idea of this technology floor support. In particular, the impact on the financial industry chain block two things: cost savings, reduce risk. Cost savings mainly reflected in various financial activities of steps to streamline and reduce the risk mainly in can significantly reduce the credit risk of both parties based on intelligent block chain of contracts. We believe that the first block chain will affect the financial infrastructure. Financial infrastructure is able to stabilize the financial activities of hardware facilities and standard systems involved, including the payment system, accounting standards, credit system, anti-money laundering laws and regulations, the regulatory system. Block chain technology its impact is reflected in authentication, digital assets, payment and settlement integration, reconstruction and regulations in four areas.
Top domestic and foreign financial institutions to block chain technology very seriously, everyone agreed that the block chain for the financial industry, if not subversive role, will have a huge impact, as we briefly examine the following block chain finance technology the impact and influence of the main areas of business:
1, the impact on the national central banks

in view of the popular Bitcoin transactions, the central bank now various countries around the world are based on an in-depth study of digital currency block chain. From the point of view of the currency, currency block chain based encryption technology has three characteristics: First, it is clear to a center of the pattern; second, it is a distributed billing system; third, it is discrete of the payment system.
The center of the clearing model is no longer necessary to provide clearing services for the central bank, all that to the Internet "spontaneous" Finish. Books distributed block chain with a running account of the way the record on this network to the current record of all transactions, which means that you can calculate from the start by the back-calculated for each node involved in the transaction account balance, so as to automatically complete the liquidation function, without the help of the banking system to be liquidated.
Historically, settlement issue has always been the most important driving force of the birth of the Central Bank, the monetary base distribution rights that liquidation rights. Technically, the block chain liquidation is very clever, do not need people to intervene, all handled automatically, but also a high degree of security, to be much lower than it is now that the cost of the transfer system with the central banks of each country. Faced with this situation, the central bank needs to learn and understand the block chain technology, active use of the block chain technology design a new currency, rather than spontaneous social currency design, it may lead to inefficiencies. The central bank should at least master-making power in the future rules of the game, in order to change currency after leading, this is a socially responsible attitude, after all, money is the blood of the economy.
2, the impact on commercial banks

if you want to do on the block chain liquidation, then the digital currency on the block chain is actually a number on the super books, this figure does not rely on bank accounts exist, which means that, in the block chain present digital currency which is not dependent on the independent monetary banking system. So, if the digital money become an independent currency in the future it will compete with traditional commercial bank household savings.
Commercial banks may adopt asset-light model to deal with the impact of technological development, the focus became loan product design, product launch after the investor's discretion whether to buy, loan assets belonging to investors, commercial banks only help investors to consult , risk control and operations, earned consulting fees and service fees are commissions, profit model into a type of investment banks.
It can be anticipated that the future of the majority of commercial banks may no longer accept deposits under the block chain technology environment, the level of risk appetite relatively high investors can go to the bank and buy their own risk appetite to match the loan assets. Great changes will occur throughout the financial ecology.
3. The impact on investment banking

Current securities issuance and trading process complicated and inefficient. The application block chain in this area you have the following three values:
First, the chain can block the flow of securities transactions more concise, clear, fast, securities companies often provide only investment advice other advisory services at this time, more such as the role of expert consultants.
Second, the block chain capable of near real identity of the trader, trading volume and other key information is recorded, in favor of issuers more quickly and clearly understand issuance, improve business decision-making efficiency; at the same time, open and transparent basis on the block chain but also to track electronic records system can reduce the secret operations, the possibility of insider trading, in favor of issuers and regulatory authorities to maintain a fair market, information asymmetry caused by the agency cost is greatly reduced.
Third, the block chain a lot of time making the trading day and the settlement date of the securities from the interval in days to shorten in minutes, greatly reducing transaction delays and transaction risk, improve efficiency and controllability of securities transactions, information transfer more fluid.
In order to survive in the block chain era, securities firms need to strengthen software application development capacities, block chain technology and design, design better products, to attract the attention of investors, securities companies professional capacity need to be further strengthened, value-oriented, to evaluate and verify the value of all securities products, screening investment projects, to provide investment advice to investors in order to increase the value of the investor's assets for their own business objectives. In this case, a small specialized securities companies will have good living conditions.
4, the impact on the insurance company.

Block chain technology will also have an impact on the insurance industry. First, to further effectively prevent insurance fraud. The reality of the insurance business, have occurred disputes between insurers and policyholders, insured or potentially fraudulent, or dispute the claim occurred. Open block chain technology provides, sharing real data effectively safeguarding the integrity of the insurance, and the contract also features smart to avoid claims disputes. Secondly, the mode will change the insurance industry. The current insurance industry is the business model of insurance, the insurer is the insurance company. In this mode, the insurance company driven by profit, while risk pricing was thinking more about their own interests, relationships with customers is the opposite. Point of mutual trust under the block chain technology system, the effective implementation of intelligent contracts will gradually shift to mutual insurance model. In this mode, the insurer is no longer an insurance company but every participant, will be used to pay the premiums of the insured person, realized the insurer and the insured person's identity unity.