Web3 Meets Banking: A New Era of Secure Customer Engagement

Abstract

Security and user experience are critical priorities in modern banking, yet traditional authentication practicessuch as passwords and one-time passwords (OTPs)-remain vulnerable to phishing, credential theft, and data breaches. This research explores the integration of blockchain-based authentication, specifically using MetaMask for passwordless login, as a secure alternative for digital banking systems. The proposed approach eliminates centralized credential storage by leveraging cryptographic signatures and client-side verification, thereby enhancing both security and user privacy. A prototype banking application was developed and evaluated, demonstrating a 50 % reduction in authentication time and improved resistance to phishing attacks. The study further analyzes decentralized identity management's implications for regulatory compliance, including GDPR and KYC alignment. By comparing conventional and Web3 authentication systems, this work illustrates how decentralized login mechanisms can significantly strengthen banking security, streamline user interaction, and promote a transparent, customer-centric digital banking ecosystem.