Abstract

This paper investigates the use of blockchain technology to enhance cybersecurity for financial transactions within digital banking systems. As digital banking continues to expand, the need for robust security measures against threats like fraud, data breaches, and unauthorized access becomes increasingly critical. Blockchain's decentralized structure, cryptographic protocols, and consensus mechanisms offer a potential solution by providing a tamper-resistant, transparent ledger that eliminates single points of failure. This study evaluates how blockchain can improve transaction security and privacy, utilizing qualitative case studies from financial institutions alongside quantitative analyses of blockchain’s performance and security features. The findings suggest that blockchain significantly enhances security, particularly in fraud prevention and transaction transparency, compared to traditional systems. However, issues like scalability, system integration, and regulatory challenges remain. The research highlights blockchain’s potential for revolutionizing digital banking security and concludes with recommendations for its implementation, including the need for further integration with emerging technologies like artificial intelligence and quantum computing to overcome current limitations.

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