Before we get into how smart contracts are changing the world of banking and investing, let’s get define what a smart contract and a dApp are. Then we can explore why dApp developers are focusing on smart contracts. 

The basics

Basically, a smart contract is a program that has been coded by a dApp developer into a (usually) blockchain to set the requirements of how folks can interact with said blockchain. When the smart contract is considered to be valuable, as in the case with Bitcoin which lets people invest in and exchange the original cryptocurrency, its value rises. By the way, dApp developers do not only write smart contracts for cryptocurrency mining, investing, and trading.      

Meanwhile, a dApp is a blockchain enabled website. However, all on its own, a dApp is not able to connect and communicate with the blockchain unless there is a smart contract allowing it to. This is just the beginning of why  solidity developers are all a gaga about smart contracts. 

How are smart contracts disrupting banking and investing? 

Smart Contracts Are, Well, Smart

• You remember the last time you applied for a credit card or a bank account, don’t you? Well, do you remember all of that crazy legalese contract crap that came along with it? Yeah, I bet you do. Well, besides being too lengthy, somewhat difficult to read, and having been written by lawyers, this type of contract, also known as a dumb contract, also sucks because it is open to interpretation… 
• Smart contracts, on the other hand, are not burdened by any of the above listed problems that dumb contracts are. A smart contract is what it is. Written by a dApp developer, it only controls the, for example, cryptocurrency, that is part of its output data. It is not open to interpretation since its requirements are baked into it by the dApp developer; these requirements cannot be modified let alone interpreted.    

Smart Contracts Are Secure

• dApp developers create smart contracts that are very secure simple because they need them to have value to others.  
• The key to a smart contract’s security is the fact that no one owns the dApp, the blockchain, or the smart contract. What this means is that once a dApp developer makes that original smart contract, folks all around the world can copy it, which means that it is quickly dispersed all around the globe on seperate devices. If an evil-doer somehow changes one of copy of this blockchain, the other copies simply override the altered version.     

Smart Contracts Offer an Insane Level of Privacy

• Although the Internal Revenue Service would indeed like to know who is investing in cryptocurrencies, so far most digital coin exchanges have not been forced to turn over this information. And, when it comes to other blockchain niches that dApp developers are writing smart contracts for, the level of privacy available is even more absolute.    

Smart Contracts Are Fast

• Just how fast are these dApp developer-written smart contracts? Well, they are instant. They are also accurate. When you invest and bank via a smart contract connected to a blockchain, you will not have to fill out any forms nor wait for any type of approval (unless the smart contract is written to require a waiting period). How would you like to invest and bank without having to wait for days for your transfers to go through and without having to fill out form after form? Yep, me too!

Smart Contracts in the Real World

Being smart, secure, private, and fast are all fine and dandy in the theoretical world. However, if smart contracts are truly going to revolutionize banking and investing, dApp developers are also going to need to code smart contracts that make both sense and cents for those working in finance. Yeah, dApp developers have to make the smart contracts worth the while of both the service provider and the consumer:

Smart contracts saving investment banks big bucks 

The exciting news is that smart folk are beginning to understand this. In fact, Forbes Magazine recently reported that smart contracts have the potential to be such a game changer that "investment banks alone could save up to $12 billion per year by adopting blockchain and smart contracts, effectively a program code that automatically performs some actions when pre-defined conditions occur (i.e. if X does Y, then execute Z)." 

Smart contracts are a treasurer’s dream come true 

Think about how a treasurer could use smart contracts to great effect. With the right code, a dApp developer can build a system that automatically alerts a treasurer anytime any unusual transactions occur. This is insanely valuable for those people who are tasked with providing financial oversight. 

Smart contracts for cash managers

Other dApp developers are writing code for cash managers. Genpact, a consulting firm, has recently released a blockchain that speeds up cash flow while concurrently cutting down on billing errors. The firm's senior vice president Shantanu Ghosh said, "Leading companies will be those that harness the power of digital technologies to transform processes, improve billing quality and timeliness and drive greater accuracy and visibility." 

Such a blockchain and smart contract will save companies countless work hours and costs, while likewise adding value to the customer by drastically reducing the number of billing disputes. Now, what cash manager would not love these results?