The impact of blockchain technology in banking : How can blockchain revolutionize the banking industry?

Abstract

A blockchain is an ordered, decentralized, immutable ledger that allows a recording of transactions in a network. Over recent years, blockchain has emerged to be a technology that can be applied in various sectors. It has promised to be the technology that will allow transactions simply, effectively, safely, and cheaply. The main aim of this thesis was to study the possible impacts of blockchain in the banking industry along with its challenges and limitations. The outcome would include a good explanation of blockchain technology, how it works, future bank implementation, and its challenges. To answer the research questions, a literature review was conducted. The articles were selected from evidence-based scientific databases such as ABI Inform, Academic Search Elite, Emerald, Sage Premier, ScienceDirect, Springer Open, and Google Scholar. Six scholarly articles were selected by using inclusion and exclusion criteria and screening the relevant articles. Data were systematically extracted and grouped into five main categories. The result shows that blockchain technology could enhance the efficiency of various sectors of the banking industry. It has the potential to upgrade and transform the cross-border payment, trade finance, capital markets, and financial reporting and compliance. It also makes the process of knowing your customer straightforward. So, the implementation of blockchain is projected to disrupt the banking and finance system by facilitating a new way of payment, faster trade execution, secured ledger, smart contracts, and many other innovations. However, there are some obstacles such as regulation and technological challenges to be solved for efficient implementation in the banking sector