Evaluation of the Economic Efficiency of Blockchain for Customer Identification by Financial Institutions

Abstract

Today, digital technologies are developed and used in all economic sectors without any exception. The financial sector is one of the drivers for the digitalization of the economy, which caused the emergence of fintech, an innovational industry that is based on the fusion of state-of-the-art digital and financial technologies. Blockchain is one of the most promising technologies in the financial sector. It has become widely used to create cryptocurrencies. This technology is used in many areas of the financial sector, for example, for customer identification by financial institutions. This research involved building of a model using the net present value method to evaluate the efficiency of the implementation and use of the automated decentralized database using the blockchain technology for bank customer identification. The paper presents the results of the modeling for three cases: for the most favorable economic conditions with minimum costs and maximum benefits, for average conditions and the least favorable economic conditions. The analysis of the modeling results identified financial institutions with a certain number of customers for which it will be economically viable to implement blockchain.