The impact of blockchain on the banking sector: A systematic review of applications, challenges, and future directions

• Provides a comprehensive systematic review of blockchain adoption in global banking using PRISMA 2020. • Analyzes 38 peer-reviewed studies (2020–2024) covering payments, compliance, DeFi, trade finance, and CBDCs. • Identifies empirical evidence of efficiency gains, transparency improvements, and compliance automation. • Highlights major challenges: interoperability, regulatory misalignment, privacy-accountability trade-offs. • Proposes strategic, regulatory, and technological pathways for sustainable blockchain-enabled finance. This systematic review evaluates blockchain adoption in the banking and financial sector through 38 peer-reviewed studies published between 2020 and 2024. Following PRISMA 2020 and Kitchenham’s methodological standards, it provides a transparent synthesis of how blockchain is reshaping payments, settlements, trade finance, KYC/AML processes, data governance, and Central Bank Digital Currencies (CBDCs). Evidence shows consistent gains in transaction speed, reconciliation accuracy, and auditability, confirming blockchain’s transition from a disruptive concept to an emerging institutional infrastructure. However, significant challenges persist, including scalability limits, interoperability gaps, regulatory misalignment, and privacy-accountability tensions. The review highlights a shift from pilot experiments toward early industrial integration supported by consortium-based governance and hybrid architectures. It concludes with strategic implications for banks and regulators, emphasizing collaboration, flexible regulatory frameworks, standardized interoperability protocols, and the development of transparent and explainable RegTech solutions.