The Evolution and Implementation of Blockchain Technology in Improving Data Security and Privacy in the Financial Sector

Abstract

Blockchain technology has evolved rapidly as the foundation for Bitcoin. Initially applied to cryptocurrency transactions, blockchain is now widely adopted in the financial sector to enhance efficiency, transparency, and data security. This technology enables decentralized, encrypted, and immutable transaction recording, significantly reducing the risks of fraud, manipulation, and data breaches. Its implementation in the financial sector encompasses diverse applications, including cross-border payment systems, digital identity verification, as well as real-time auditing and transaction tracking. Despite these advantages, blockchain adoption still faces challenges, such as regulatory uncertainty, infrastructure limitations, and insufficient understanding among industry stakeholders. This study aims to analyze how blockchain technology can strengthen data security and privacy in the financial sector while identifying both the potential benefits and the challenges related to its implementation. The findings are expected to provide insights into the role of blockchain in transforming financial services and ensuring more secure and trustworthy digital ecosystems.