Enhancing Financial Transaction Security through Blockchain and Machine Learning: A Framework for Fraud Detection and Data Privacy
Year: 2024
Type: article
Abstract: Objective This study examines the integration of blockchain technology and machine learning (ML) to enhance financial transaction security, with a focus on fraud detection, data privacy, and operational transparency. To explore the combined capabilities of blockchain’s decentralized ledger and ML’s predictive analytics in securing financial transactions. Methodology A systematic review was conducted, sourcing relevant studies from academic databases like IEEE Xplore, SpringerLink, and ScienceDirect. Studies covering blockchain, ML, and their collaborative impact on financial security were selected, classified, and analyzed. Comparative analysis methods highlighted both strengths and limitations of this dual-technology approach. Findings and Discussion Results indicate that blockchain’s immutability and transparency, alongside ML’s data-driven fraud detection capabilities, create a robust framework for transaction security. Blockchain effectively ensures data integrity and transparency, while ML algorithms improve fraud detection and decision-making through real-time data analysis. However, challenges such as scalability, high energy consumption, and high implementation costs persist, limiting adoption in small and medium-sized institutions. Implications The combined application of blockchain and ML presents a transformative potential for financial sectors, particularly in enhancing transaction integrity, regulatory compliance, and risk management. This framework can serve as a model across various industries beyond finance, including government and non-financial organizations, to foster a secure transaction environment. Limitations This study primarily relies on qualitative data and lacks empirical validation through quantitative measures. Further, blockchain’s energy-intensive nature and ML’s data dependency pose obstacles to widespread implementation, especially in resource-constrained settings. Future Directions Future research should aim at developing cost-effective and energy-efficient blockchain and ML solutions to support broader adoption. Additionally, advancements in quantum computing and AI-driven blockchain could address existing security vulnerabilities, making the technology more accessible and scalable.
Authors: Fisan Shikder, Fisan, Hossain jaman Sohag
Language: English
Subfield: Information Systems
Field: Computer Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W6893095210
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