Abstract
Blockchain is one of the primary digital technologies utilised in the finance industry with huge future potential. This study conducts a systematic literature review of a final sample of 407 prior literature from an initial set of 1979 records for the sample period of 2013–2020 with regard to blockchain adoption in banking. This review is further supplemented by a machine learning based textual analysis that identifies key themes, trends, divergences and gaps between academic and practitioner led industry literature. Moreover, the study highlights present, future use cases, adoption barriers and misconceptions of blockchains in banking, especially given COVID-19. Furthermore, this study identifies behavioural, social, economic, regulatory and managerial implications of blockchain based banking. In addition, our study identifies the cross-industry potential of blockchains via banking, thus, linking much disconnected prior literature. Finally, we develop a blockchain adoption framework and an adoption life cycle for banking. This study would be of interest to academics, bankers, regulators, investors, auditors and other stakeholders in financial markets.
Highlights
Journal of Risk and FinancialBanks and payment services have been around for centuries and predate modern capitalism (Ferguson 2008; Hodgson 2015)
Studies included in the final sample of 407 articles possess factors that can be repurposed or relevant for blockchain adoption in banking
Present blockchain applications in banking primarily revolve around core banking, payments, smart contracts, supply chains, trade finance, financial markets, risk management, compliance, insurance, digital identity management (Disparte 2017; Watson 2017; Beikverdi and Song 2015; Benet 2014)
Summary
Banks and payment services have been around for centuries and predate modern capitalism (Ferguson 2008; Hodgson 2015). Fintech is defined as “products and companies that employ newly developed digital and online technologies in the banking and financial services industries” (Aggarwal and Stein 2016). Blockchain (BC) is one of these key innovative technologies (Biais et al 2019). Blockchains are distributed ledgers that can maintain, secure verifiable records and proof of transactions, reducing double spending of tracked transactions. During COVID-19 crisis, China is leveraging blockchain in the country’s COVID-19 recovery. The Blockchain-based Service Network (BSN) developed by China is estimated to decrease blockchain-based business transaction costs in China by 80% (World Economic Forum 2015).
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