Blockchain Technology and its Potential to Mitigate Corruption in Banking

This study explores the potential of blockchain technology to mitigate corruption in the banking sector, a critical issue threatening economic stability. Banking corruption, driven by bribery, fraud, and insider trading, undermines financial integrity and public trust. Traditional mechanisms for preventing such activities have proven inadequate, prompting the need for innovative solutions like blockchain.The research utilizes a comprehensive literature review, analyzing case studies and academic sources to understand the causes of banking corruption and assess how blockchain can address these issues. By leveraging blockchain’s decentralized and immutable ledger, the study highlights how this technology can enhance transparency, reduce fraud, and improve compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.Key outcomes indicate that blockchain technology offers a promising solution to combat banking corruption by removing intermediaries and securing transaction data against tampering. The study finds that blockchain’s ability to record transactions in a transparent and immutable manner can greatly reduce opportunities for corruption. However, challenges such as regulatory gaps and the early-stage development of blockchain remain obstacles to widespread adoption. The paper concludes with recommendations for further research to explore the full potential of blockchain in banking.