Navigating the Blockchain Landscape: Role, Challenges, Risks, and Issues in the Banking and Finance Sector

Due to its potential to fundamentally alter a number of sectors of the financial services industry, blockchain technology has been attracting a lot of attention. However, several obstacles prevent its widespread adoption and application. Scalability is one of the biggest issues with blockchain technology. Traditional block chains, like those used by Bitcoin and Ethereum, have capacity and processing speed restrictions. For many large-scale applications, their low transactional capacity per second is insufficient. Their modest transactional throughput per second is insufficient for many large-scale applications. The complexity of blockchain protocols makes it more difficult for developers who may not be familiar with them to create blockchain apps because they need specialized knowledge and abilities. Considering the autonomous and international nature of blockchain networks, it can be difficult for organizations to traverse complex legal frameworks and maintain compliance with existing legislation. The blockchain business needs standardized frameworks and protocols, which causes complexity and restricts compatibility. Cryptocurrency-related negative instances including fraud, scams, and unlawful activity have stoked fears and stoked skepticism about the technology. Financial institutions, technology providers, regulators, and standardization bodies must work together to address these issues. To get over these barriers and realize the full potential of blockchain technology in the financial services industry, continued research and development activities are essential, as well as regulatory certainty. In this article, we conducted a methodical analysis of the blockchain technology, its use in the financial and economic sector, the current situation, and the difficulties.