BLOCKCHAIN’S OPPORTUNITY IN PROTECTING TRANSACTIONS AND INFORMATION IN MALAYSIAN BANKS
Asia Pacific Journal of Emerging Markets, Vol. 7, No. 2, 2023 ISSN: 2706-5634
Authors: Fong Jun Yi, Mohd Karim Abdul Majed, Hafinaz Hasniyanti Hassan
ABSTRACT
In recent years, there has been widespread interest in applying blockchain technology to the financial sector. The primary objective of this study is to investigate the potential of blockchain technology for securing banking transactions and data in Malaysia. The study thoroughly examined the measures currently implemented in the Malaysian banking sector and how blockchain technology could improve them. This study used primary data and three variables that provide opportunities for blockchain technology: transparency, security, and consistency. The survey considered the opinions of 104 sample respondents regarding Blockchain implementation. All information is obtained from the bank’s experts. In addition, the study utilized the Statistical Package for the Social Sciences (SPSS) to evaluate the relationship between three variables that can influence Malaysian banks’ implementation of blockchain technology to secure information and transactions. All variables, including transparency, security, and consistency, were found to have a significant relationship with implementing blockchain technology in Malaysian banks. The study’s findings shed light on the viability of implementing blockchain technology in Malaysia’s banking industry and its potential impact on the sector. Overall, the study aims to educate banks about blockchain technology and enhance the technology’s role in Malaysia’s banking industry regarding security and privacy.
INTRODUCTION
A blockchain is a type of distributed ledger that is made up of a digital combination of transactions that are monitored and recorded in a decentralized network. It is not centrally controlled, and no single person or entity influences the network’s capacity to disrupt it. A blockchain comprises various data blocks, each of which holds a record of information. By connecting them, managing all information transactions ensures that records cannot be tampered with. This improves people’s confidence in the network. Blockchain technology can lower transaction costs while improving transaction efficiency and speed (Likos, 2021). Over time, new technology has become important in transforming economic and social systems, thus attracting the attention of many enterprises and international organizations. Blockchain is an emerging technology with significant business advantages (Dicuonzo et al., 2021). For the banking industry, blockchain technology is the core underlying technology. Economic revolution, Internet expansion, and financial innovation have forced the banking industry to transform urgently to find new ways to increase company (Guo & Liang, 2016). According to Deloitte’s 2018 Global Blockchain Survey, 34% of organizations polled had already started adopting blockchain technologies, with another 41% planning to do so in the future year (Deloitte, n.d.). Since 2015, blockchain has received great attention in the field of fintech. The system includes distributed data storage, point-to-point transmission, consensus procedures, and encryption methods. A distributed ledger is a shared, duplicated, and synchronized database among network members. It keeps track of network participants’ activities, such as assets or data exchanges. All network participants must approve all record updates or changes in distributed databases. The distributed ledger technology of blockchain has transformed how businesses conduct business transactions (Brakeville & Perepa, 2017). A peer-to-peer network is a decentralized communication model in which two nodes communicate. They do not need a central server to communicate with each other. This means that once the network has been established, participants can share and store files without intermediaries (Vermaak, 2021). In addition, one of the most interesting aspects of blockchain technology is the application of various consensus mechanisms to establish decentralized consensus…
Keywords: Blockchain, Malaysian Banks , Transparency , Security
References
Reference to this paper should be made as follows: Yi, F. J., Abdul-Majeed, M.K. & Hassan, H. H. (2023). Blockchain’s Opportunity in Protecting Transactions and Information in Malaysian Banks. Asia Pacific Journal of Emerging Markets, 7(2), 102-118.