Leveraging blockchain for enhanced risk management: Reducing operational and transactional risks in banking systems
1 Independent Researcher, Lagos, Nigeria.
2 Guaranty Trust Bank (Nigeria) Limited.
3 Newcross Exploration and Production Limited, Nigeria.
4 Independent Researcher, UK.
5 Independent Researcher, Canada.
Review Article
GSC Advanced Research and Reviews, 2022, 10(01), 182-188.
Article DOI: 10.30574/gscarr.2022.10.1.0031
Publication history:
Received on 20 December 2021; revised on 22 January 2022; accepted on 24 January 2022
Abstract:
The banking sector faces significant challenges in managing operational and transactional risks, which can result in financial losses, inefficiencies, and reputational damage. With its unique attributes of decentralization, transparency, immutability, and advanced cryptographic security, blockchain technology offers a transformative solution to these challenges. This paper explores the role of blockchain in mitigating operational risks, such as human error, fraud, and system failures, through automation, enhanced auditability, and process accountability. It also examines how distributed ledger technology addresses transactional risks by improving payment security, minimizing settlement delays, and enhancing data integrity. The paper highlights the key benefits of blockchain adoption for risk management and provides recommendations for its effective implementation, including the need for regulatory adaptation, technological investment, and cross-sector collaboration. This analysis underscores the potential of blockchain to revolutionize banking operations and strengthen risk management frameworks in the financial sector.
Keywords:
Blockchain Technology; Risk Management; Operational Risk; Distributed Ledger; Financial Security; Banking Systems
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Copyright © 2022 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0
