Harnessing blockchain technology in banking to enhance financial inclusion, security, and transaction efficiency
1 Independent Researcher, UK.
2 Leenit, UK.
3 Independent Researcher, Lagos, Nigeria.
4 Nigeria Inter-bank Settlement System Plc (NIBSS), Nigeria.
Research Article
International Journal of Scholarly Research in Science and Technology, 2024, 05(01), 035–053.
Article DOI: 10.56781/ijsrst.2024.5.1.0032
Publication history:
Received on 23 July 2024; revised on 29 August 2024; accepted on 31 August 2024
Abstract:
This paper examines the potential of blockchain technology in revolutionizing the banking sector by enhancing financial inclusion, security, and transaction efficiency. With traditional banking systems often excluding underbanked populations and being prone to security vulnerabilities, blockchain offers a decentralized and secure alternative. The study explores how blockchain can lower barriers to financial services for underserved communities, reduce fraud, and streamline transaction processes. The research methodology includes a comprehensive review of existing literature, case studies of early blockchain adopters in banking, and an analysis of the technology's scalability and integration challenges. Key findings indicate that blockchain can significantly improve financial inclusion by providing accessible banking solutions, especially in developing regions. Additionally, its cryptographic security features are shown to mitigate risks associated with cyberattacks and fraud, while smart contracts and peer-to-peer transactions reduce operational costs and processing times. However, the paper also highlights potential regulatory hurdles and the need for robust governance frameworks to ensure widespread adoption.
The study concludes with strategic recommendations for banks and financial institutions on implementing blockchain technology, emphasizing the importance of collaboration with regulators and the continuous evolution of blockchain infrastructure. Future prospects include the integration of blockchain with emerging technologies such as artificial intelligence and the Internet of Things (IoT), which could further enhance the capabilities of financial institutions. This paper underscores the transformative impact of blockchain on banking, offering insights into strategies that organizations can adopt to stay competitive and inclusive in a rapidly changing financial landscape.
Keywords:
Blockchain Technology; Banking Sector; Decentralized Finance (DeFi; Central Bank Digital Currencies (CBDCs; Operational Efficiency; Smart Contracts; Financial Innovation; Customer Trust, Data Security; Cross-Border Payments; Regulatory Compliance; Digital Transformation; Financial Services; Competitive Advantage; Supply Chain Management; Trade Finance; Emerging Technologies; Digital Economy; Financial Transactions; Customer Experience.
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Copyright information:
Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0