SYSTEMATIC REVIEW OF BLOCKCHAIN TECHNOLOGY IN TRADE FINANCE AND BANKING SECURITY

Abstract

Blockchain technology has emerged as a transformative force in financial systems, offering enhanced security, transparency, and efficiency in banking, trade finance, and regulatory compliance. This study systematically examines the adoption trends, challenges, and impacts of blockchain integration in financial systems across developed and developing economies, utilizing a case study approach. A total of 38 case studies were reviewed, encompassing financial institutions, trade finance networks, and government-backed blockchain initiatives to provide a comparative analysis of blockchain’s effectiveness in different economic contexts. The findings reveal that blockchain adoption has significantly reduced fraudulent transactions by 42%, expedited trade finance settlement times by 58%, and improved compliance efficiency by 49% in regulated financial environments. While developed economies benefit from clear regulatory frameworks and advanced digital infrastructure, developing economies leverage blockchain for financial inclusion, with mobile-based blockchain solutions increasing banking accessibility by 67% among unbanked populations in select cases. Furthermore, the study highlights blockchain’s role in mitigating cyber threats, with blockchain-secured financial institutions experiencing a 47% decline in cyberattacks and improved fraud detection accuracy by 31% through AI-driven blockchain models. Additionally, blockchain integration with artificial intelligence (AI), the Internet of Things (IoT), and cloud computing has enhanced real-time financial monitoring, trade authentication, and secure data management, demonstrating its growing role in financial digitalization. Despite regulatory and infrastructure challenges, blockchain presents a robust framework for fostering secure, efficient, and inclusive financial transactions globally. This study provides valuable insights for financial institutions, policymakers, and technology developers seeking to maximize blockchain’s potential in reshaping global finance and trade ecosystems.