From readiness to performance: examining blockchain integration in financial services and its effects on transparency and efficiency

Abstract

Purpose This study investigates to investigate the main determinants of financial service industry adoption blockchain technology and their impact on financial transparency and efficiency. In particular, the paper looks at how technological readiness, organizational control and supporting regulations enable blockchain use among financial institutions working in the banks of Jordanian banking sector. Design/methodology/approach A quantitative research design based on a structured questionnaire was employed, which was distributed throughout Jordanian banks to senior and middle-level management. Responses were collected from senior executives, heads of divisions, IT managers and branch managers who are involved in both the financial and technological decision-making processes. SmartPLS was used to conduct Partial Least Squares Structure Equation Modeling (PLS-SEM) analysis using SmartPLS on 192 valid responses to check the measurement model and test the theorized relationships in proposed research framework. Results Results show that technological readiness, organizational governance and regulatory support play an important role in encouraging blockchain technology uptake by financial services. Furthermore, financial institutions adopting blockchain update general ledger journal records in an interactive way which is positively associated with the degree to which financial transparency and operational efficiency are attained. This underscores the part played by technological capabilities as well as governance frameworks and regulatory contexts in encouraging successful blockchain adoption while helping to improve institutional performance. Originality/value In articulating a new frame of analysis from a TOE perspective that takes into account technological, organizational, and environmental factors together, the paper contributes to an emerging literature on adoption of blockchain by financial services. Moreover, it carries out an empirical examination of the performance effects associated with introducing blockchain technology into the banks of Jordan the country which is focused on enhancing financial transparency and operational efficiency. JEL classification G32; K22; O16; L60.