Page 27 - BANKING FINANCE APRIL 2024

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manner. In contrast, Web 3.0 introduces autonomy, as it enhanced user control. At its core lies blockchain technology,
operates without control from a singular entity. Additionally, enabling trustless and transparent transactions through
Web 3.0 is anticipated to offer users the opportunity to own decentralized networks. This shift empowers individuals,
and govern their content, along with the ability to manage allowing direct peer-to-peer interactions without
it profitably. This shift towards user-centric control fosters intermediaries.
a decentralized network, characterized by openness,
trustlessness, and permissionless interactions. Features of Web 3.0:
Open: The system will be developed using open-source
In the past decade, innovations in machine-readable data
software, ensuring transparency and allowing the entire
and discussions surrounding data ownership and control
process to unfold in the public domain.
have given rise to the conceptualization of Web 3.0.
Although still in its initial design phases, Web 3.0 holds the Trustless: Interactions between consumers will transpire
promise of a more advanced and sophisticated web
without the need for any intermediary, eliminating the
experience, built upon principles that aim to redefine how necessity for third-party involvement.
data is owned, accessed, and managed. This ongoing
evolution underscores the dynamic nature of the web, as it Permissionless: Consumers will have the freedom to access
continues to adapt to the changing needs and expectations
the provided services without requiring authorization from
of users in an increasingly interconnected world.
external agencies, promoting a system where participation
is open and unrestricted.
The banking landscape is poised for a significant
transformation as we stand on the cusp of the Web 3.0 era.
In the last few decades, the digital revolution has Decentralization and Blockchain in
fundamentally altered how financial institutions operate, but Banking
Web 3.0 promises an even more radical shift. This paradigm The decentralized nature of Web 3.0 has profound
shift is expected to revolutionize banking systems by implications for banking. Blockchain, the underlying
leveraging decentralization, blockchain technology, and technology, facilitates immutable and transparent
increased personalization. As we navigate this transition, transactions, reducing the need for traditional
understanding the potential of Web 3.0 in banking becomes intermediaries. Smart contracts automate and execute
crucial.
agreements, streamlining processes like loans, payments,
and identity verification.
Evolution of Banking: From Traditional

to Digital This technology not only enhances security but also promotes
financial inclusivity, enabling access to banking services for
Banking has evolved immensely since its inception.
Traditional banking involved physical branches, paper
transactions, and face-to-face interactions. With the advent
of the internet, banking transcended geographical
boundaries, offering online services and digital transactions,
making financial operations more accessible.

However, the core banking infrastructure remained
centralized, reliant on intermediaries, and susceptible to
security breaches and inefficiencies. This laid the groundwork
for a new phase in banking evolution - Web 3.0.

Understanding Web 3.0
Web 3.0 represents the next phase of the internet,
characterized by decentralization, interoperability, and

24 | 2024 | APRIL | BANKING FINANCE