Decentralized Finance (DeFi) Transforming the Landscape of Financial Services

Abstract

This chapter explores the role of Decentralized Finance (DeFi) in transforming the global financial ecosystem, focusing on its objectives, challenges, and potential. It highlights how DeFi platforms leverage blockchain technology to provide financial services without intermediaries like banks. The chapter identifies gaps in existing literature, particularly around DeFi's long-term sustainability, regulatory challenges, and scalability. Using a systematic literature review, the impact of DeFi on lending, borrowing, insurance, and asset management is analyzed. Findings show that DeFi enhances financial inclusion, transparency, and efficiency, but faces challenges such as regulatory uncertainties, legal issues, security risks, and user experience concerns. The chapter suggests that DeFi has the potential to revolutionize financial services, offering significant implications for academics, society, industry, and researchers.