Blockchain Technology and its Implication for the Financial Sector in Zambia

Abstract

Blockchain is the technology that underlies Crypto Currencies and it is poised to revolutionise current existing business processes and models. Its impact is being felt in many spheres of the financial industry in many jurisdictions around the world. Transactions on the blockchain are validated by a network of participating nodes using proof of work or proof of stake algorithms. Security of the data is guaranteed by the application of cryptographic hash functions. The technology has the characteristic of delivering very secure, transparent and innovative financial products. This study presents a systematic literature review of blockchain technologies and their potential application in the financial sector with the view of identifying open challenges and opportunities that it can address in the Zambian Financial Sector Context. The focus of the study was limited to the finance, banking, insurance, tax, mortgages and fintech sectors. The findings of the research showed that the Zambian financial sector can benefit from applying blockchain in its operations. Key benefits to be derived include tamper-proof customer identity validation, guaranteed security and trust, reduction of operational costs, elimination of third parties in transaction processes, reduced financial risks and reliable data sharing and verification.