SITER Author

Dr. R. V Naveenan

Faculty in Koshys Institute of Management, India

Dr. Naveenan’s Article

Blockchain in Banking- A Revolution by Itself

Bockchain can be defined by three special features. First of all, blockchain is a distributed technology that enhances visibility and transparency of stored transactions. Second, as an immutable database, the blockchain guarantees a single one. A version of the reality that helps create trust in the knowledge stored. Third, the blockchain facilitates the automated execution of transactions. Blockchain disrupts the banking sector and contributes to an increase in banking data. Blockchain technology is a central, underlying technology with promising prospects for banking applications. Economic transformation, the creation of the Internet and financial changes are also affected. The banking sector, therefore, needs urgent restructuring and is looking for new avenues for development. As a result, blockchains could revolutionise and improve the underlying payment clearance infrastructure and credit information systems in banks. Its introduction also encourages the development of “multi-center, slightly intermediated” scenarios that will improve the efficiency of the banking industry. However, despite the less self-regulation of blockchains, governance and the realistic application of the decentralised system remain unresolved problems. Yet Blockchain can solve the problems inherent to the banking sector. It is an autonomous revolution that will expand the horizons of the banking sector.

Blockchain is a Distributed Technology which provides transparency in transactions and improve trust in the transactions.

Block Chain is a technology that has captured FinTech’s attention. It includes a range of computer-based technologies, including data storage, point-to-point transfer, consensus and encryption. It was also seen as a milestone in the web era. Following the advent of Big Data, many industries like banking have been effectively disrupted.  This has a huge impact on the future of the data processing industry. However, considering that the block chain represents a major step forward in data storage and data transmission, it is possible to analyse existing financial and economic operating models that are leading to FinTech’s latest round of technical growth and industrial transformation.

Even though blockchain is seen as a challenge, it has created some opportunities to streamline conventional banking processes. The current relationship between the banking industry and blockchain is complicated (Lang, 2017a). According to Lang (2017b), the security of blockchains justifies a shift by banks away from their conventional business transaction strategy, and the industry is bound to be disrupted as payments are a wide banking segment (Lund, 2017b). Lower blockchain transaction costs and increased speed are the major benefits to the banking industry, Mason’s (2017). This will also increase with the emergence of new Fintech start-ups that help in building cheaper banks. Blockchains are the way forward for the banking sector in terms of competition and technical advantages for creative business models (Kocianski 2018).

Business authenticity is routine and important for banks as a result of anti-money laundering regulations (Sarnitz & Maier 2017). KYC is a vital factor in preventing the illegal use of bank funds and money laundering and terrorist capital which results in increasing terrorist problems (Marr, 2017). Based on blockchain technology, banks can accelerate settlement times by enabling individuals and businesses to control a consensus-modified, cryptographic transaction list directly (Lang, 2017a). Tapscott and Tapscott (2016) note that blockchain technology can reduce payment times by minutes or seconds, while Ho (2016) alerts us to the possibility of a 24-hour bank transaction.

Bank security is of utmost importance. According to Tapscott and Tapscott (2017), 45 per cent of financial intermediaries face economic crimes, compared to 20 per cent and 27 per cent in the services and technology market. Thus, Blockchain is a key component of the future extra-security model of Digital Banking (Maiya, 2017). Since past, information cannot be updated and recent information is effectively exchanged in real-time by various individuals, the manipulation of data is difficult for Blockchain (Garcia, 2018; Harsono, 2018). Experts’ points out that changes in data blocks can be tracked and monitored to prevent fraud and mismanagement and, more significantly, blockchain technology allows real-time communication and potential scam notification. As it stands, the banking industry is debating the promise of blockchain transaction technology. Thus we can understand that Blockchain will increment the bank’s performance and thus transform the banking industry.


Blockchains could revolutionize, update and transform banks’ underlying payment clearing and credit information infrastructure. Regulatory, competitive and security issues have sparked a wide-ranging discussion on any new financial breakthrough. During the Big Data Banking Boom, Blockchain created a number of opportunities, but also disrupted traditional banking business models. It’s as ground-breaking for others as the Internet, although it’s over-hyped for others or seen as challenging conventional banking. The industry does not have a consensus on the feasibility and usefulness of blockchain banking. Yet opportunities will soon overcome challenges as the industry finds a consensus about how best to move forward, and regulators understand the benefits that the revolution will bring to banking worldwide. However, current challenges do not disturb history as they eventually address technological, regulatory and other blockchain technology concerns. The prospect of incorporating blockchain technology into banking seems most likely in the immediate future.


1.Garcia, A. (2018). IBM’s blockchain app store wants to help banks cut costs. Source:
2. Harsono, H. (2018). Bank-based blockchain projects are going to transform the financial services industry. Retrieved from are-going-to-transform-the-financial-services-industry/
3. Ho, F. (2016).What blockchain actually means for the future of banking. Retrieved from https:// 4dd868d020cf
4. Harsono, H. (2018). Bank-based blockchain projects are going to transform the financial services industry. Retrieved from are-going-to-transform-the-financial-services-industry/
5. Kocianski, S. (2018). The blockchain in banking report: The future of blockchain solutions and technologies. Retrieved from
6. Lang, J. (2017a). Three uses for blockchain in banking. Retrieved from blogs/blockchain/2017/10/three-uses-for-blockchain-in-banking/
7. Lang, J. (2017b). Building the future of financial services with IBM Blockchain at Sibos. Retrieved from ibm-blockchain-sibos/
8. Maiya, R. (2017). How to be a truly digital bank. Journal of Digital Banking, 1(4), 338–348.
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12. Tapscott, A., & Tapscott, D. (2017). How blockchain is changing finance. Harvard Business Review, 1, 2–5.



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