Understanding the Role of Blockchain Technology in Transforming Financial Services

Abstract

The role and application of blockchain technology (BCT) has increased significantly in financial services in the past decade as the adoption of this technology improves transparency, security, privacy, immutability and accountability in the transaction process. Since the relevance of blockchain technology for financial markets has increased, this article aims to critically discuss the role of blockchain technology in transforming financial services to develop a comprehensive understanding of the topic. Relevant and accurate qualitative data is gathered from reliable secondary sources to establish a critical view regarding the implication of blockchain technology for financial services. The data analysis denoted that blockchain technology has revolutionised the financial service sector due to easing cross-border transactions, borrowing and lending, security treading, auditing and bookkeeping, credit-score reports, hedge funds, settlements and clearing processes. Smart contracts, cryptocurrency, distributed ledger technologies, DeFi and others played a critical role in improving financial services. Analysing the prevalent trends in data it seems that the growth of the financial service sector is dependent on BCT.