Blockchain in Fintech: Use Cases and Solutions Inspired by Inoxoft’s Project

TL;DR

• Overview of the blockchain solution inspired by our recent project.
• The results of our work led to operational costs falling by around 30% and an increase in our client’s user base by 25% within the first year.
• A detailed walk-through of all essential steps, from data gathering to deployment.
• Blockchain technology will reach nearly $1,000 trillion by 2032
• Examples of successful blockchain-based companies:

Aave holds $20.65 billion in total value locked (TVL) spread across eight networks and 15 markets, showcasing significant trust and usage.

Bloom has helped over 100,000 users get credit without the usual barriers, making financial access easier for everyone.

BitGo tokenizes over $100 million in real estate assets

Compound has over $2.2 billion in crypto assets, clearly demonstrating strong demand for crypto loans.

• DeFi expansion, Central Bank Digital Currencies, and ESG financing are the future blockchain trends in fintech

How We Helped a Fintech Company Slash Transaction Processing Time by 25 Times

We recently worked with a fintech company—let’s call it FinTech Innovations to respect the NDA agreement we signed. Our client specialized in digital payment solutions and online lending, mostly for small and medium-sized businesses and individual consumers. Although it’s been around since 2015 and had a solid customer base, the market was shifting, and the company needed to keep up.

The Challenge

Like many fintechs, the client was running into some pretty common industry issues but wanted a fresh approach to stay ahead. To find a solution, our team started with a discovery phase, where we surveyed both the company’s clients and employees. We found several key problems:

• Payments sometimes took up to three days to fully settle, which didn’t go over well with customers who expected everything to happen instantly.
• Reliance on multiple middlemen led to increased fees, making its services less competitive.
• Data breaches were becoming more frequent, and customers were nervous about their personal information being exposed.
• The company’s clients wanted more transparency in the transaction process; people were starting to lose faith in the system.

The Implemented Solutions

Driven by our findings, we knew blockchain was the solution, so our team proposed several ways to implement it into the client’s existing systems:

• Decentralized Ledger Technology (DLT). This allowed transactions to happen in real-time without middlemen slowing things down. Plus, it reduced settlement times from days to just seconds.
• Smart contracts. Our team automated processes they were still doing manually, like loan approvals and payment confirmations. The change resulted in faster service, fewer errors, and significantly lower operational costs.
• Security features. Security was a big priority for our client, so we also took advantage of blockchain’s built-in cryptographic encryption and decentralized storage, making customer data more secure and giving users peace of mind.
• Transparent transaction history. Every transaction was now recorded on a transparent ledger, restoring customer trust and allowing easy access to transaction details.

The Results

We can’t share everything because of the NDA, but this case is a great example of how blockchain can completely transform a fintech company. Not long after our project was completed, the results spoke for themselves:

• Transaction times dropped from 72 hours to less than 10 seconds. 
• Operational costs fell by around 30%, mainly because the company no longer had to rely on intermediaries. 
• With lower fees and faster services, FinTech Innovations attracted more customers, growing their user base by 25% within the first year. 

Looking to achieve similar results with blockchain? Let’s talk about your project.

How We Did This: A Step-by-Step Process

As we mentioned earlier, everything started with the discovery phase, where we conducted interviews with the company’s clients and staff. This later allowed us to understand where we should use blockchain’s functionality and what to optimize with its help. Now, let’s walk you through the steps we took to create a truly effective solution.

Step 1: Collected and prepared data

We started with a full audit of the client’s existing systems. But this wasn’t just about reviewing code; we wanted to understand the real pain points. So, our team began with:

• Interviews with stakeholders. Our business analysts interviewed everyone from employees to customers to get firsthand insights into where improvements could be made.
• Performance metrics review. We closely examined transaction times, error rates, customer complaints, and operational costs to quantify the impact of existing inefficiencies.
• Competitive analysis. To get a sense of the competition, we researched companies that had already integrated fintech blockchain technology, which helped us avoid common pitfalls.

As the project’s team lead explained:

“When the project started, we didn’t have a clear picture of how the project would evolve. The uncertainty sparked different opinions from stakeholders, and some were even skeptical that blockchain would disrupt their current processes. We stayed connected with everyone, hosting biweekly meetings to provide progress updates and gather feedback to keep the team aligned.”

Step 2: Identified key areas where blockchain could add value

After a detailed analysis, our team thought of a few key fields where blockchain could truly make a difference:

• Transaction speed. With speed being critical for customer satisfaction, we saw the need for real-time processing to improve the overall client experience.
• Data security. There were clear vulnerabilities in how sensitive customer information was handled, and blockchain’s cryptographic features promised a much better way to secure that data.
• Transparency. Blockchain could offer customers a crystal-clear view of their transaction history, helping to build trust and make them feel more confident in the system.
• Cost saving. We realized that cutting down on intermediaries could significantly reduce transaction fees, leading to more cost-effective operations.

But the journey wasn’t without its challenges. During initial testing, we found some weak points that could have changed our plans. Fortunately, with our experience handling such issues, we quickly figured out solutions. Here’s how it went:

Challenge #1: Network latency

When we ran early tests, it became clear that network latency, especially during peak times, was slowing down transaction speeds. For a solution that promised real-time processing, this was a big problem.

Our solution: We solved this by optimizing the network configuration. Our team chose a more suitable consensus mechanism—Proof of Authority (PoA)—which helped reduce latency without sacrificing security.

Challenge #2: Data vulnerabilities

Initial tests also flagged potential weak spots in data handling processes that could make the system a target for cybercriminals. Data security couldn’t be compromised.

Our solution: To fix this, our development team implemented multi-signature schemes and asymmetric encryption. This added an extra layer of protection, requiring multiple approvals for critical transactions.

Step 3: Selected an appropriate blockchain framework

When choosing the right blockchain framework, we carefully evaluated several technologies, focusing on what mattered most to us: scalability, security, and compliance. We looked at different platforms, including Ethereum, Hyperledger, and Corda, to find the best fit for our client’s specific needs.

“We knew we had to focus on three main things: making sure the system could handle lots of transactions while keeping security tight, following all the regulations, and fitting in with what the client was already using. Their existing system had some data security worries, plus it was a legacy setup, so that added a bit more complexity. And since financial services are so heavily regulated, we made sure compliance was a top priority from the start.”

— explains our Senior Solution Architect

After thinking it through and weighing all the options, we chose Corda as the main blockchain framework. Our decision was based on several advantages Corda offers:

• Transact directly while maintaining confidentiality.
• Implement built-in compliance features that align with the strict regulations of the financial sector.
• To create opportunities for collaboration and network benefits.

Step 4: Developed new features

During the development phase, our team concentrated on three essential features that would improve efficiency, security, and customer satisfaction. We’re talking about:

• Smart contracts. These automated agreements help streamline processes and cut out middlemen, which speeds up transactions and makes them more reliable.
• Decentralized identity verification. This feature allows users to verify their identities securely without depending on a central authority, which improves privacy and security.
• Real-time transaction processing. We wanted to ensure that transactions could be processed instantly to maintain a positive customer experience.

And, of course, we faced challenges along the way. But they weren’t serious enough to stop us from reaching our goal. Here’s how we dealt with them:

Challenge #1: Coding smart contracts

Creating smart contracts needed very careful coding to make sure we covered all possible situations. Even a small mistake could lead to big financial problems.

Our solution: We used an agile development approach, which meant we could write and test small parts of the smart contracts in a safe environment and catch any problems early on.

Challenge #1: Coding smart contracts

Early tests showed that transaction speeds could drop a lot during busy times because of network congestion.

Our solution: To solve this, we used Layer 2 solutions, specifically state channels. These let us process transactions off the main blockchain while still keeping everything secure.

Step 5: Launched the beta version

When the beta version of the new platform was ready, we wanted to get everything polished while still in development. The ultimate goal was to make sure the transition felt natural and we could catch any hiccups before the official launch.

After users tried out the platform, our team sent out surveys to gather feedback. We asked about their experience with specific features, how easy the platform was to use, and their overall thoughts. That’s what the surveys brought to our attention:

• Technical glitches: During beta testing, users ran into a few technical bumps – specifically slow load times and some random crashes. Thanks to the detailed responses that we gathered, our team jumped on these issues right away, releasing patches and making the necessary changes.
• Feature confusion: Some features weren’t as intuitive as our developers hoped, and users weren’t sure how to use them. To clear things up, we set up live Q&A sessions where users could chat directly with our team engineers, so their questions were answered on the spot.

Plus, we opened up a dedicated support channel for beta testers, where they could report any issues or share insights directly. It wasn’t just about quick fixes—it also helped create a sense of community. Users felt more connected, and this made them more engaged throughout the testing phase. As one beta tester put it, “The quick response from the team and the open dialogue made me feel like my input really mattered.”

Step 6: Improved the system based on user feedback

After beta testing, our development team jumped into action, using feedback from the target audience to make real improvements to the platform. Here’s what changed:

• Simpler navigation: During training and follow-ups, we noticed that some users had trouble getting around the platform. So, the team revamped the menus, so the most-used tools were front and center.
• Cleaner page layouts: Certain pages got a facelift with an improved design. Key actions are now highlighted, while unnecessary options have been reduced to give users a more straightforward experience.
• Two-Factor Authentication (2FA): To keep accounts safer, we added 2FA, meaning users need to verify their identity with a second method—like a text or app—when logging in or doing something sensitive.
• Better encryption: The platform now uses even stronger encryption to protect sensitive data, so all information exchanged during transactions is secure from potential threats.

So, here’s how we approached building a blockchain platform for our client. However, each project comes with its own challenges, and what works in one case might not be the right fit for another. That’s why working with a skilled team is the smartest choice.

If you have any questions or would like a free consultation to discuss your project, we’re here to assist!

How Else Can You Use Blockchain in Fintech?

Normally, when people send money, services like PayPal or Visa are in the middle, which adds extra fees to transactions and slows operations down. But with blockchain, customers can do this directly to each other, cutting out the middlemen, and making the whole process much faster and cheaper. 

Nicolas Cary, the co-founder of Blockchain, breaks down the meaning of this technology for the finance industry and the whole world,

“There were $7.7 trillion in credit card transactions last year, costing consumers hundreds of billions of dollars in fees. What’s really exciting about blockchain is that anyone on the planet can now download a piece of free and open-source software and instantly put it on their phone. And these 10,000 lines of open-source software code can replace your bank. Anyone on Earth, regardless of where they’re born, can now put an app on their phone and start to transact with anybody else on the planet. This works a lot like email, and it’s going to start changing a lot of things.”

Blockchain is already being widely adopted across industries, and its use is expected to expand even more in the coming years. Statista’s market research projects that the technology will reach nearly US$1,000 trillion in value by 2032.

Sounds groundbreaking, doesn’t it? Now, we’ll explain more about the use of blockchain in fintech and share some great examples of how this technology is already transforming the industry.

Decentralized Finance (DeFi)

DeFi is shaking up the way your company can handle finances, allowing you to operate without financial institutions in the middle. As a result, payments move faster, cash flow improves, and you dodge the usual piles of paperwork that slow things down. 

You also get to cut out the middlemen, lowering transaction fees and making your services more affordable for customers. Plus, you can easily access international markets, handle cross-border payments, and attract global investors—all without the high fees intermediaries usually impose. Let’s take a look at one company already thriving thanks to DeFi:

Aave

Aave is a big name in the DeFi space, especially when it comes to lending. Launched in 2017, it handles billions of dollars every week across Ethereum and more than 12 other networks. 

“The biggest advantage of DeFi is that it is permissionless to participate (no KYC, credit score, etc.), the same rules apply to everyone, liquidity is ’borderless’ (you can access the market from anywhere & anytime as long as you have internet), and it’s non-custodial so you have full control over your money and you can use it however you want.”

— Stani Kulechov, CEO of Aave

What makes Aave stand out? Smart contracts. These are self-executing programs that do the heavy lifting: they figure out loan terms, collect collateral, and send out the cryptocurrency being borrowed—all without a middleman. This level of efficiency has made Aave incredibly popular. 

As of November 2024, the company has US$20.65 billion in liquidity spread across eight networks and 15 markets. Moreover, it regularly holds over US$11 billion in total locked value (TVL), showing just how much people trust and use the service.

Automated Credit Reporting

Imagine that there is no need for businesses to rely on outdated credit scores to prove their financial worth. Blockchain is making that a reality. With every transaction recorded on a decentralized ledger, companies are now able to build a credit history that’s completely transparent and based on real financial activity. No more guessing or relying on a narrow set of data—lenders get a clear, accurate picture of a company’s health.

And the benefits don’t stop there. Startups and businesses without traditional credit histories finally have a way to access capital. Instead of spending weeks jumping through hoops for loans, they can leverage their blockchain activity and collateralized assets to secure funding quickly and easily. It’s a game-changer for anyone looking to grow their business without being held back by old-school credit checks.

Bloom

Bloom is a blockchain-powered platform that’s changing the rules for credit scoring and identity verification. It helps traditional and digital lenders reach billions of people who currently can’t get a bank account or a credit score. 

Powered by Ethereum and IPFS, Bloom creates a global, transparent credit profile that anyone can access—no need for complicated banking systems or secretive credit scores. With Bloom, lenders can securely offer loans to the 3 billion people left out of the traditional financial world. So far, the service has helped over 100,000 users get credit without the usual barriers, making financial access easier for everyone.

That’s how Bloom’s co-founder, Jesse Leimgruber, describes the company’s vision,

“Bloom’s vision of creating a global ecosystem will only be achieved with large-scale community support. Bloom isn’t controlled by one government, one state, one bank, or one company, it’s controlled by everyone. Inviting users to participate early in the network is the easiest way to achieve this vision.”

Tokenization of Assets

What if a piece of real estate, art collection, or equity could be instantly transformed into liquid, tradable assets? That’s the magic of tokenization. By creating digital representations of these physical items on the blockchain, you can unlock a new world of possibilities.

With tokenization, you can open up fractional ownership to more investors, creating new investment streams without the headache of traditional asset trading. And because these tokenized assets can be traded instantly on decentralized exchanges, the old barriers of slow, expensive transactions melt away. So, we can say that tokenization is about opening doors to new investment opportunities that were once out of reach.

BitGo

BitGo (formerly Harbor) is an all-in-one platform that makes investing in tokenized commercial real estate easier than ever. Registered with FINRA, a major financial regulator, the company opens the door to premium private assets alongside top investors, offering lower investment minimums and the potential for better liquidity and value.

A standout moment came in 2024 when Goldman Sachs teamed up with BitGo to tokenize part of its commercial real estate portfolio from one of its REITs. This partnership shows how traditional financial institutions are increasingly adopting tokenization to improve their asset management strategies. 

“Tokenizing private securities allows issuers to lock up capital, without locking up investors,” – said Joshua Stein, former CEO of the Harbor platform. “The prospect of greatly increased liquidity for private securities will enhance capital formation, create new investment opportunities, and support economic growth. Harbor is the enabling technology platform for securities issuers and broker-dealers to completely tokenize private securities.”

Crypto Lending and Borrowing

For fintech companies, staying competitive means always finding new ways to help clients access capital. Crypto lending and borrowing platforms are providing just that. These platforms let businesses lend out unused cryptocurrency, creating a new stream of revenue without the hassle of traditional intermediaries.

On the borrowing side, companies can help clients secure loans by using their crypto holdings or collateralized assets, bypassing conventional credit requirements entirely. This gives companies a level of flexibility that’s unheard of in the traditional financial world.

Compound

Compound is a very successful decentralized platform built on blockchain that lets users deposit their crypto into lending pools, making it available for borrowers. In return, lenders earn interest on the assets they contribute. When you make a deposit, Compound issues a new type of cryptocurrency called a cToken, which represents your deposit. Some examples of these cTokens are cETH, cBAT, and cDAI.

Simply put, now, anyone with cryptocurrency can quickly lend or borrow without the costs associated with traditional financial institutions. With over $2.2 billion in crypto assets, Compound clearly shows the strong demand for crypto loans.

Learn how it works in detail as Robert Leshner, the founder of Compound, explains the intricacies of the crypto lending world:

Do these cases sound inspiring? Become the next blockchain pro with our expert services!

What Does the Future Hold for Fintech with Blockchain?

Although some people still view blockchain and cryptocurrencies with skepticism, they will very soon become an integral part of our financial system. In 2024, about 6.8% of all people already own cryptocurrency, which amounts to over 560 million crypto owners around the world.

“Blockchain is already starting to change the way we handle our finances, but this is just the tip of the iceberg. I really believe that in the next five years, we’ll find some incredible new ways to manage our assets. Just imagine a world where every transaction is open and clear, and financial services are designed with you in mind. That future is closer than you think, and blockchain solutions for fintech are going to help us get there.”

– says our COO Nazar Kvartalnyi

We researched to gather predictions on what to expect in the fintech sector as blockchain quickly paves the way for it. And that’s what we’ve found:

DeFi Expansion

Back in 2008, while the world was dealing with the chaos of the global financial crisis, Bitcoin enthusiasts saw a chance to build a completely independent digital cash system. What began as a bold idea has now blossomed into the global DeFi market, which is set to soar. Experts predict it could hit $48.02 billion by 2031, with a steady annual growth rate of 9.06% from 2024 to 2031.

Adrian Keller, Leader Audit for Blockchain at PwC Switzerland, says the future of blockchain looks bright,

“In the last few years, several big trends have really fueled the explosive growth of DeFi. We’re seeing decentralized exchanges, lending and borrowing, and even insurance products evolving fast, almost mirroring the traditional financial world. This new way of handling finance might eventually impact centralized finance, as DeFi could become a cheaper, faster, and more relevant alternative.”

Integration with Central Bank Digital Currencies

A new study from the Atlantic Council shows a huge spike in global interest in central bank digital currencies (CBDCs). According to the report, 134 countries and currency unions, which together make up 98% of the world’s GDP, are now exploring this financial innovation. 

All G20 nations are looking into CBDCs, and 19 of them are already deep into research. Out of those, 13—including Brazil, Japan, India, Australia, and Turkey—are running pilot programs to test digital versions of their currencies. On the other hand, countries like the Bahamas, Jamaica, and Nigeria have already fully rolled out their CBDCs.

Jamaica introduced its CBDC, JAM-DEX, in April 2022, and while the Bank of Jamaica has been pushing for its wider use, adoption has been slow due to a lack of wallet providers. In contrast, both the Bahamas and Nigeria have seen a faster rise in CBDC usage as local authorities actively promote their use. We expect more countries to follow this same path soon.

Sustainable Financing and ESG Investments

High capital costs are a major roadblock in the transition to cleaner energy and reducing greenhouse gas emissions, making it seem riskier to invest in climate change infrastructure. This problem hits developing countries particularly hard, as they are often on the front lines of climate impacts while grappling with high financing costs that limit their access to climate finance.

However, the rise of digital dollars could help break this cycle. Many people in countries like Argentina, Venezuela, Nigeria, and Kenya are turning to DeFi as a solution for managing savings, securing loans, making payments, and investing.

“DeFi platforms that prioritize sustainability, social impact, and transparent governance are attracting investors who care about more than just making money. As more ESG-focused DeFi platforms emerge, they are appealing to both everyday investors and major players who want their investments to align with their values. This push toward sustainability is helping DeFi go mainstream, as traditional finance catches on to the need for more responsible investing.”

– explains our Senior Business Analyst

To Sum Up

The fintech blockchain market is set to grow from $2.1 billion in 2023 to about $49.2 billion by 2030, but it isn’t just some popular fancy tech; it’s transforming how we manage money and information, opening up new possibilities that can really make a difference in our lives. 

Think about it: blockchain can make transactions safer, improve supply chain tracking, and speed up payments. Plus, with smart contracts, we can automate processes and simplify operations, tackling many of the everyday problems in fintech.

To get the most out of blockchain, it’s important to know exactly what you need. That’s why partnering with a skilled development team is so helpful. If you’re looking for a reliable partner to help you navigate blockchain in fintech, we’re here to assist you. Our team focuses on building blockchain solutions that solve real business challenges, so you can make the most of this innovative technology.

Tell us about your ideas, and let our experts handle the technical details while you focus on shaping your business vision.