Examine the Feasibility of Implementing Blockchain Technology in the Sri Lankan Banking System

Abstract

In the era of digitization, it is important that Banks and Financial institutions stay up to date with the latest technology. Blockchain technology is one such technology which has become a widely discussed topic when it comes to finance in the digital era. The objectives of this study are to identify the factors that affect Blockchain adoption as well to identify the possible applications of it in the Sri Lanka banking sector. The study applied qualitative research approach. An interview guide was created and banking professionals were interviewed in order to understand their take or perception on Block Chain implementation in the Sri Lanka Banking sector. This study discovered that the application of Blockchain technology for shared KYC, trade finance, and Central Bank Digital Currency (CBDC) was possible. When deploying Blockchain technology, interoperability problems, regulatory limits, and lack of knowledge were the main obstacles. Additionally, the presence of Fin Tech companies, the regulator's attitude, the cooperation of banks, customers' perceptions, and the banking system's capability functioned as catalysts to enable such an adoption. The results and suggestions of this study would benefit bankers, educators, and practitioners in their efforts to examine the factors that affect the adoption of Blockchain technology. It will also help them to develop workable solutions for their problems. This will also help authorities like the Central Bank in order to create a proper framework for the implementation of block chain technology in the Sri Lanka banking sector. The study will contribute to extend the existing literature on Blockchain adoption and that it will help to create the much-needed framework in order to successfully implement Blockchain technology in banking system while set precedence for future research on this area.