Advanced Data Analytics in Green Finance: Blockchain and Digital Twin Integration

Introduction

In financial sector from the beginning of the 21st century there are several major changes happened. These changes are due to the change in technology and the growing awareness of environmental awareness. The growing concern of the sustainability of the environment the new concept emerged and known as Green Finance. Green Finance is now popular topic among the public and the researcher. Green finance's development is indicative of a more widespread acknowledgment by society of the critical nature of environmental issues in the financial industry (Weber, 2018).

The research conducted by Shamshad, Akhtar, Alam, Khan, and Ansari about blockchain-digital twin financial instruments for green investments is crucial. Akhtar et al., (2021) identify the “YES Bank Fiasco: Arrogance or Negligence” as an incident that underscores challenges within the banking sector and emphasises the necessity for robust financial organisations to endorse environmentally friendly initiatives. This case study indirectly emphasises the criticality of financial transparency and accountability afforded by blockchain technology.

“Consequence of Financial Crisis on Liquidity and Profitability of Commercial Banks in India” by Ansari et al., (2023) and “Measuring the Performance of the Indian Banking Industry” by Akhtar et al., (2021) provide empirical support for this claim. These studies demonstrate the efficiency and resiliency of banks in the face of financial crises, demonstrating that innovative financial products require a stable banking system. Blockchain technology has the potential to make transactions more secure and transparent, hence boosting stability. Finally, Akhtar et al., (2022) investigate how big financial changes effect banking efficiency in “Measuring Technical Efficiency of Banks vis-à-vis Demonetization.” This study implies that blockchain and digital twins can assist the banking industry in adapting to large-scale economic developments, which is critical for green investment strategies. These studies provide a thorough understanding of the banking sector's dynamics, which is required for developing and deploying blockchain-digital twin-era financial instruments for green investments.

The development of power of computer and accordingly the advancement of the data analytics techniques given the necessity of support to the emergence of Green Finance. Advance data analytics helps in evaluating, forecasting, and optimizing investment strategies, ensuring that they align with environmental sustainability goals (Carè et al., 2019).

The blockchain technology is the revolutionary development that offer the level of security, transparency, and efficiency that was not available earlier. Blockchain's fundamental characteristics, that are immutability and decentralization, make it a effective tool for Green Finance, helping to build trust and credibility in financial transactions (Yli-Huumo et al., 2016).

On the other hand, the concept of digital twins, through which it is possible to create a virtual replicas of physical assets, has begun to reshape financial investment strategies. Due to the Digital twins real-time monitoring and scenario analysis is possible that provides invaluable in managing and optimizing Green Investments (Tao & Qi, 2018).

This chapter aims to examine the collaborative integration of blockchain technology, digital twins, and big data analytics in green finance. It explores how this triangle can revolutionize sustainable financial practices, enhancing transparency, productivity, and decision-making efficacy. Through this study, the chapter provides a comprehensive reference for academia, industry, and government stakeholders, who are at the forefront of identifying and implementing technologically-driven solutions to the challenges of sustainable finance.