Blockchain and Decentralized Finance: A Systematic Review of the Transformation of Financial Services

Abstract

Blockchain technology and decentralised finance (DeFi) are reshaping financial services by eliminating intermediaries, automating transactions through smart contracts, and expanding global access to capital. Initially designed for cryptocurrencies, blockchain has evolved into a transformative ecosystem that optimises resource management and democratises finance. This study explores the impact of blockchain and DeFi on financial services, focusing on adoption opportunities and challenges. It addresses key gaps in the literature, particularly platform interoperability, security in decentralised environments, and adoption in emerging markets. Using the PRISMA 2020 methodology, the research ensures a rigorous selection and critical evaluation of scientific articles to identify trends, barriers, and potential developments. Findings indicate that blockchain and DeFi can enhance financial inclusion, improve transparency, and strengthen decentralisation. However, they also present challenges such as regulatory uncertainty, technical complexity, and security risks. Overcoming these obstacles requires innovative solutions and strategic collaboration among governments, financial institutions, and technology developers. By shedding light on these dynamics, the study contributes to a deeper understanding of how blockchain and DeFi can reshape financial services, paving the way for a more inclusive, efficient, and secure financial ecosystem.