Block chain technology in banking sector

The paper was very much important to understand the security as well as the privacy issues related to the use of block chain technology in the banking sector. The paper highlighted the limitations of the technology and presented solutions to resolve them. The research methodology included both primary and secondary data collection procedures, and the paper followed ethical considerations throughout. The findings of the paper can be used to improve the efficiency and productivity of the banking sector organization.

Running head: BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Block chain technology in banking sector
Name of the Student
Name of the University
Author Note:

1BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Abstract
The prime objective of the paper is to understand the role of the block chain technology in the
banking sector. The paper will be highlighting the outline of the thesis and the problem statement
in the introductory sections. The research questions will be ensued by the research hypothesis.
The secondary data collection will be presented as Literature Review. The research methodology
will be stating the selected data collection and data analysis procedures of the research along
with the research design. The selected sampling method and research methodology will be
discussed in the paper as well. The paper will be successfully highlighting the implications of the
research as well as the ethical considerations of the paper. The findings of the paper and the
impact of the paper on the field will be presented in the final chapters of this mini research.

2BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Table of Contents
Introduction......................................................................................................................................5
Outline of the thesis.........................................................................................................................5
Problem Statement...........................................................................................................................6
Research Question...........................................................................................................................6
Structure of the paper.......................................................................................................................6
Research Hypothesis........................................................................................................................7
Literature Review............................................................................................................................7
Research Methodology..................................................................................................................10
Type of investigation.....................................................................................................................10
Data Collection..............................................................................................................................10
Data Analysis.................................................................................................................................11
Sampling Method...........................................................................................................................11
Research philosophy......................................................................................................................11
Discussion and implication of the research...................................................................................11
Ethical implications.......................................................................................................................12
Findings of the paper.....................................................................................................................12
Impact on the field.........................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................15

3BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Introduction
The foremost determination of the paper is to focus on the application of the
specifications provided by block chain technology in the banking sector industry.
Block chain technology is defined as the type of technology which are very much
important to manage huge complex information in different industries such as the banking sector
industries (Pilkington, 2016). The community of the users of numerous industries can be
improved with the help of the block chain technology. The centralized servers of the business
organizations are managed with the help of the block chain technology. The client server
network model can be also improved with the help of the block chain technology (Peters &
Panayi, 2016). The access and permission of the internal stakeholders of the organization can be
managed in a professional manner with the help of the block chain technology.
The complexities of the banking sector such as the strategic risks, compliance risks,
credit risks, cyber security risks, market risks, liquidity risks, open hazard risks, operational
risks, reputational risk and the systematic risk can be resolved or minimized with the help of the
block chain technology.
Outline of the thesis
This paper will be very much essential for the consumers as well as the employees of the
banking sector to resolve the complexities of using block chain technology in the banking sector.
The complexities of the block chain technology is the most significant point of the paper.
Supporting ideas and arguments coming from the data collection procedure will be very much
important to maintain the effectiveness of the paper (Raskin & Yermack, 2016). The following
section of the paper will be evaluating the problem statement of the research paper.

4BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Problem Statement
The volatility of the block chain technology is significant concern of this technology
which is increasingly used in the banking sector industry. Illicit transactions and data redundancy
are the other concerns of the block chain technology which can have a direct negative impact of
the growth and productivity of the banking sector organization. The following unit of the paper
will be highlighting the research questions of the paper.
Research Question
The following research questions of this paper are stated below:
 What are the limitations of the block chain technology which might have a direct impact
on the banking sector?
 What are the security as well as the privacy issues which are needed to be resolved?
 How issues such as data redundancy of block chain technology can be resolved?
Structure of the paper
The structure of the assignment will be very much important to understand the
effectiveness of the paper. The data collection procedure of the paper is of two types such as
secondary as well as primary data collection procedure (Nguyen, 2016). The organized structure
of the paper indicates that this paper can be widely used in the future researches in the same
topic. The following unit of the paper will be very much important as it will be presenting the
opinion of renowned researchers about the use of block chain technology in banking sector.

5BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Research Hypothesis
There are two different categories of research hypothesis which will be considered in the
paper is described in the following table.
Hypothesis Explanation
H1 The incorporation of the block chain technology will not have any effect on the
productivity as well as the efficiency in banking sector organization.
H0 The incorporation of the block chain technology can have a positive impact on
the productivity as well as the efficiency of the organization.
Table 1: Hypothesis table
(Source: Created by the author)
Literature Review
As discussed by Bech & Garratt (2017), data redundancy is a significant concern
regarding the use of block chain technology in the banking sector. The researcher of the paper
stated that minimization of the issues of the block chain technology can help the banking sectors
to improve their net profitability (Sankar, Sindhu & Sethumadhavan, 2017). The complexities of
the databases is the reason behind the redundancy issues of block chain technology as stated by
the researcher. The researcher stated that the banking records should be dependent in the
primary key of the table (Manda & Polisetty, 2018). The researcher of the paper stated that the
application of normalisation forms such as BCNF can be very much important to minimize the
redundancy issues of the block chain technology (Peters, Panayi & Chapelle, 2015). The prime
limitation of the paper is that it focuses on most of the critical aspects of the database
normalization techniques which can be very much useful to solve issues such as data redundancy

6BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
(Fung & Halaburda, 2016). However, the limitation associated with the paper is that it does not
discusses the application of the normalization techniques in a detailed manner.
As mentioned by Beck & Müller-Bloch (2017), designing of the database must be done
in a professional manner in order to remove the complexities of the block chain technology. The
researcher of the paper stated that the application of block chain technology can be very much
improved with the help of the effective data management of the banking hierarchy (MacDonald,
Allen & Potts, 2016). The researcher of the paper stated that consensus models are very much
beneficial to minimize the privacy and security issues of block chain technology. The researcher
of the paper stated that fault tolerance, liveliness and safety can be very much essential to
safeguard the business data of the banking sector organization (Franklet et al., 2018). The
researcher of the paper stated that transparency of the transactions can be improved with the help
of the consensus models (Wüst & Gervais, 2018). According to the researcher consensus
algorithms can be very much important to mitigate the challenges of the block chain technology.
The main advantage of the paper is that it helps in understanding the complexities of the block
chain technology in a detailed manner. The limitation of the paper is that it does not presents a
graphical representation of the complexities of the block chain technology.
As stated by Cocco, Pinna & Marchesi (2017), there are lots legal issues associated with
the use of the block chain technology in banking sector. The researcher of the paper mentioned
about the legal issues of block chain such as jurisdiction, associations with de-centralized
autonomous organizations. The contract enforceability is the other issue of the block chain
technology which can be a negative effect on the service provided by the baking sector industry
to their consumers (Guo & Liang, 2016). The researcher also stated about the data security issues
of the block chain which can have significant impact on the banking sector such as the MITM

7BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
attacks, data tampering, DDoS threats. The concept of maintaining Confidentiality, Integrity and
Availability of the business data can be very much important for the all the stakeholders of the
organization (Yeoh, 2017). The security issues of the block chain technology was presented in a
logical manner in the paper which helps in understanding issues in an organized manner (Eyal,
2017). The prime limitation of the paper is that it helps in understanding the security as well as
the privacy issues of the block chain technology. The issues of the financial transactions can be
purposefully solved with the help of this paper (Johnson, 2017). However, there are few
limitations of the paper such as the lack of critical analysis. The other limitation of the paper is
that it does not provides a case study to support all the discussions made in the paper.
According to Collomb & Sok (2016), network speed and the transaction cost are the
major challenges of the use of block chain technology in the banking sector. The researcher of
the paper stated that the application of the block chain technology in the database of the banking
sectors is a huge challenge as there might be human errors while accessing the garbage (Huckle
& White, 2016). There are numerous security flaws associated with the use of block chain
technology. The regulation of the block chain technology are different in different countries
which has to be capitalised by the banking sector industries. There are scalability issues of the
block chain technology is also a significant concern for the stakeholders of the banking sector
industry (Crosby et al., 2016). The researcher of the paper stated that the transaction speed of
major payment gateways such as PayPal is increasing each day, which is the other issues
regarding the application of block chain technology. The network size of the block chain
technology is also a concern for the internal stakeholders of the banking sector industry (Gupta
& Gupta, 2018). The prime advantage of the paper is that it helps in understanding most of the
limitations of the block chain technology which are extensively used in banking sector industry

8BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
(Zambrano, Young & Verhulst, 2018). However, there are few disadvantages of the paper as
well as the entire paper is written in a generalized manner.
Research Methodology
This unit of the paper will be discussing the research methodology of this paper such as
the data collection and discussion of the investigation type to understand the data collection
procedure of the paper.
Type of investigation
The research design which will be considered in this paper are exploratory research
design. The exploratory research design states that the research will be conducted with the help
of the scientific viewpoints. At the same time it can be also said that descriptive investigation can
be also applied in the paper if needed as the paper will have numerous assumptions.
Data Collection
The data collection process which is considered in the paper can be categorized in two
categories such as the primary data collection procedure as well as the secondary data collection
procedure. Primary data will be collected from a personal interview where an employee of a
banking sector will be sharing her experience about the complexity as well as the issues of using
block chain technology in banking sector. Secondary data will be collated from the peer
reviewed articles where renowned researcher have stated the opinion about the usability of the
block chain technology in the banking sector.

9BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
Data Analysis
The primary data which will be collected from the personal interview will be analysis
with the help of the quantitative data analysis technique whereas the secondary data will be
analyzed with the help of the quantitative data analysis technique.
Sampling Method
The paper will be considering two different types of sampling method for each of the two
data collection procedures. Probabilistic sampling method will be used for the primary data
collection and Non-probabilistic sampling method will be used for the secondary data.
Research philosophy
The research philosophy which will be considered in this paper is the positivism as the
paper is highly structured. Since the paper considers both qualitative as well as quantitative data
analysis thus it can be said that positivism philosophy is very much appropriate as the research
philosophy of this paper.
Discussion and implication of the research
Ethical clearance is very much desired to maintain accuracy, honesty, fairness and
protection of the human rights. Rights and safety of the participants of the data collection
procedure will be contributing to the effectiveness of the paper. Ethical approval is very much
important to deal with security and privacy issues of the paper.
It can be said that ethical clearance and considerations are very much important for the
maintaining the effectiveness of the paper. The data collection procedure which will be followed

10BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
in the paper should not be used in any other purposes. Any sort of plagiarism issues must be
avoided from the paper so that there are no data privacy issues associated with the paper.
Ethical implications
The most significant ethical considerations is associated with the data which will be
collected from numerous primary as well as secondary sources. The personal interview must not
be biased as the participant should not be forced to make any statements. Management of the
financial resources is the other significant ethical considerations of this paper. The other ethical
implications is regarding the secondary data collection procedure is providing reference to the
researchers whose works have been considered in the paper as well.
Findings of the paper
The paper was very much important to understand the security as well as the privacy
issues of the block chain technology in banking sector industry. The paper also helped in
concluding the importance of maintaining professional database design in the banking sector
which can help in understanding and resolving the limitations of block chain technology. The
paper also identifies the importance of the consensus algorithm which can be helpful to mitigate
the challenges of the block chain technology in banking sector. The other legal complications of
block chain technology such as the de-centralized autonomous organizations and jurisdictions
can be presented in the paper as well. The paper also helped in identifying the challenges of
block chain technology such as network speed and transaction cost.
Impact on the field
The paper can be very much important for the readers of this document to understand the
complexities of the block chain technology which are extensively used in the banking sector

11BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
industry in the recent times. This research paper can be very much beneficial foe both the
consumers as well for the IT experts of the banking sectors as they can understand the insights of
the block chain technology which are used in their working environment.
Conclusion
The different categories of risk which can arrive after the application of the block chain
technology can be identified from the paper as well. The concept of data redundancy can be also
concluded from the paper as well. The paper helps in understanding the data normalization
techniques which is the mitigation step for data redundancy. The secondary data collection helps
in identifying the role of the consensus models which can be purposefully used to mitigate the
issues of data redundancy. The papers also focused on the role of the consensus algorithms
which can be effectively used to mitigate the challenges faced by the banking sector as they uses
the block chain technology to optimize their existing business functions. The legal issues of the
block chain technology can be determined from the paper as well. The paper successfully
identifies the data security issues if block chain technology in terms of the MITM attacks and the
DDoS attacks. The challenges of the block chain technology such as the transaction cost and
network speed can be also understood from the paper as well. The paper identifies the exact the
exact research design which can be used in this paper which is positivism. The investigation type
of the research paper is exploratory research design. Descriptive design was nit needed in the
paper as expected. The data collection of this paper is two types such as the primary as well as
the secondary data collection procedure. The data analysis of the paper is also of different types
such as the qualitative data analysis technique as well as the quantitative data analysis. The
sampling method which was used in the paper is both non probabilistic as well as probabilistic
sampling method. The research philosophy which was considered in the paper is positivism. The

12BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
ethical implications of the paper have been discussed in the paper in a detailed manner in terms
of maintaining the security and privacy of the collected data from both the primary as well as
secondary sources. Thus, this mini research report helps in identifying the complexities of using
the block chain technology in the banking sector industry.

13BLOCK CHAIN TECHNOLOGY IN BANKING SECTOR
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