Blockchain in Banking: A Critical Review of the Financial Ecosystem and Possibilities. A European Economy Perspective.

Abstract

The integration of blockchain technology into the banking industry marks a watershed moment in the financial ecosystem, with the potential to disrupt established banking structures, improve operational efficiency, and increase transparency. This paper examines blockchain applications in the European banking sector, focussing on how this decentralised technology affects financial institutions, regulatory frameworks, and client interactions. Incorporating case studies and actual data, the paper investigates the influence of blockchain on core banking processes as payments, clearing, settlement, and Know Your Customer (KYC) procedures. It also looks at blockchain's potential to improve cybersecurity, decrease fraud, and minimise operating costs, all while addressing scalability, regulatory compliance, and acceptance problems in the European financial sector.