Developing cybersecurity in open banking and open finance: the application of blockchain technology and decentralised autonomous organisations

Abstract

This chapter will explore the application of blockchain technology to open banking and open finance with respect to cybersecurity by providing an analysis that defines specific concepts, benefits, risks, challenges, and potential solutions. In order to achieve this, the chapter will examine the structural concepts and statutes regulating open banking and open finance by exploring the advantages offered to consumers and financial institutions while also assessing the requisite challenges within the modern digital financial ecosystem. Specifically, this chapter will further examine the cybersecurity risks inherent in the open banking and open finance models. Moreover, this chapter will also consider the application of blockchain technology as a tool and a system in fortifying cybersecurity within open banking and open finance through an assessment of the benefits and challenges associated with applying smart technology within these financial structures. It will evaluate how blockchain technology can be employed and developed to enhance cybersecurity measures. Conclusively, the chapter will also consider the potential of decentralised autonomous organisations (DAOs) as a solution to the security challenges faced within open banking and open finance. It will outline the characteristics and possibilities of DAOs, considering their potential to address cybersecurity risks.