How does blockchain improve security in banking?

Blockchain technology has the potential to enhance security in banking in various ways. Firstly, blockchain technology uses cryptographic protocols that make it challenging for anyone to alter or delete transactions once they are recorded on the blockchain. This ensures the immutability and transparency of the system, which is essential for maintaining the integrity of financial data.

Secondly, blockchain technology can improve security in banking by eliminating the need for intermediaries, such as banks and payment processors, to verify and process transactions. Instead, blockchain technology uses a decentralized network of computers to validate transactions, which reduces the risk of fraudulent activity and cyber attacks.

Finally, blockchain technology can enable secure and efficient data sharing between financial institutions, which can enhance antimoney laundering (AML) and knowyourcustomer (KYC) compliance efforts. By leveraging blockchain technology, financial institutions can securely and quickly share customer data and transaction histories, which can help identify suspicious activity and reduce the risk of financial crime.