Impact of Blockchain on Financial Technology – Challenges and Strategies

Abstract

Blockchain is one of the most important technologies that is revolutionizing the Financial Technology (FinTech) industry. As the blockchain adoption rate increases in the Banking and FinTech industry, it is very important for the financial institutions to understand the challenges posed by this emerging technology and enhance their risk taxonomy and controls framework to inculcate new and relevant controls in their Business, Organizational, and Information Systems Strategy. Blockchain has and will continue to be a major disrupter in the FinTech industry with applications including and not limited to Smart Contracts, Digital Payments, Investment Banking, Capital Markets, Trading, Clearing and settlement of trades, and many more. Along with highlighting the applications of blockchain in the FinTech industry, the paper further discusses the challenges and corresponding mitigation strategies in some of the most relevant domains in the blockchain and FinTech industry like security, scalability, legal and regulatory, technology development, and cyber risks.