Bìznes Inform (May 2024)
The Impact of Blockchain Technology on the Financial Sector of the Global Economy
Abstract
The aim of the article is to highlight the importance and relevance of blockchain technology for the financial sector of the global economy, as well as to find out how blockchain technology affects security and reliability in the financial sector, simplifying the processes of exchanging assets and making transactions; emphasizing the importance of blockchain technology in improving the settlement system, reducing time, and increasing market liquidity. With rapid technological development, the role of blockchain technology is growing as a key factor determining new directions for the financial sector. Since its emergence as the foundation for cryptocurrencies, blockchain has quickly evolved from an alternative concept to a powerful tool that has the potential to change the paradigm of how financial services work. Outdated methods of providing financial services have long been in need of revision. Challenges such as data entry into various systems and manual processing of information are becoming increasingly common in the financial sector. The centralized model is becoming increasingly vulnerable to cyberattacks, as all data is concentrated in one place. Consequently, to date, outdated methods of information systems and the workload of paper documents in the financial sector have proven to be not only ineffective, but also vulnerable to security risks. These problems arise from deficiencies in centralized systems that store and process sensitive information. Lack of transparency, the possibility of errors, and suspicion about security are obstacles to the effective functioning of financial institutions. To solve these problems and improve processes, it is necessary to move towards digital innovations that promote collaboration, increase trust, independence and ensure a high level of security. One of the most promising technologies that meets these requirements is blockchain, which is based on a distributed data storage system and cryptographic principles, which can provide a high level of security, transparency, and authenticity of information. It avoids intermediaries by allowing direct collaboration between participants, and it also makes it possible to store and transmit data in a secure environment without the risk of their modification.
Keywords
