Blockchain Adoption in Banking Systems: A Boon or Bane?

Introduction

Internet of things, big data analytics, and cloud manufacturing impact the economic, social, and political forces driving global corporate operations (Rossit et al., 2019 and Frizzo et al., 2020). For data storage and management, nearly all industries and enterprises continue to rely on centralized information technology systems, most of which are not real-time capable and prone to various sorts of attacks. Blockchain technology, a decentralized, transparent, and observable technology, is one of the technologies that can disrupt operations management, manufacturing drastically, and supply chain management (Upadhyay, 2020; Tapscott and Tapscott, 2017 and Swan, 2015). Blockchain can be considered a trustless system because no entity relies on a specific counterpart's trustworthiness. Immutable transaction records and decentralized governance improve network confidence (Tapscott and Tapscott, 2017 and Swan, 2015). Blockchain technology is a critical component of today's banking industry, with numerous application scenarios. It can transform the banking industry by democratizing, transparently securing, and streamlining processes. A blockchain is a decentralized ledger that records transactions between two parties in real-time. Even though these parties have simultaneous access to the updated digital catalog, the system is virtually impregnable. Through bitcoin and other cryptocurrencies, blockchain technology will impact the end of money in the banking business. More than 90 central banks worldwide are experimenting with Blockchain technology, and 80 percent of institutions are projected to use distributed ledger technology shortly (Rossit et al., 2019). As a result, most banks are building blockchain use cases to start a global banking revolution by heralding the end of traditional banking.

The present study proposes the following research questions in light of blockchain technology: RQ1. What is the financial industry's perception on blockchain? RQ2. What are the current impediments to blockchain technology's widespread adoption in banking and the perceived benefits of blockchain technology in banking? This study discusses the theoretical underpinnings for examining the potential benefits and drawbacks of implementing blockchain technology in banking.