Blockchain and Web3: Enhancing Trust, Traceability, and Security in Finance

In a context where the digitalization of financial services is accelerating, banks face growing challenges in security, compliance, and operational efficiency. Blockchain and Web3 are emerging as leading technological solutions. These innovations promise not only to enhance trust, traceability, and security in financial transactions but also to pave the way for more inclusive and decentralized economic models.

Discussions focus on several key questions : how smart contracts can secure and automate financial transactions, how tokenization is revolutionizing asset management and facilitating access to investments, and how blockchain strengthens both traceability and regulatory compliance in relevant sectors. Additionally, the role of Web3 is examined, particularly in preserving data sovereignty and security for financial actors.

This article demonstrates the contribution of blockchain and Web3 to finance. It begins by explaining the technological foundations of blockchain as the basis for decentralized trust. It then explores the securing and automation of transactions through smart contracts, detailing their applications and best practices to mitigate their risks. The third part focuses on enhancing traceability and compliance, particularly through Self-Sovereign Identity (SSI) solutions to simplify AML/KYC processes. Finally, it examines the role of Web3 as a catalyst for new economic models through asset tokenization, decentralized finance (DeFi), and financial inclusion.

Understanding Blockchain and Web3 in the Banking Context

Blockchain is a distributed, immutable, and secure database where transactions are recorded transparently and with timestamps. Web3 refers to the evolution of the internet towards a decentralized architecture aimed at giving users back control over their data and interactions, notably through blockchain and decentralized finance (DeFi).

According to Global Market Insights, the global blockchain market is expected to exceed $85 billion by 2025, with major adoption in finance for payments, lending, and tokenized asset management. Deloitte highlights that 65% of financial institutions began deploying blockchain solutions in 2024.

These technologies are based on decentralization, eliminating sole reliance on a trusted third party, which profoundly alters classic banking paradigms.

Recommendation: We advise adopting an integrated strategy combining private blockchain and hybrid Web3 solutions to optimize security and compliance while remaining agile.

1.Blockchain: A Technological Foundation for Decentralized Trust

Blockchain proposes an alternative model where trust is disintermediated and built into the protocol through three technological pillars.

1.1 Distributed Ledger Technology (DLT): A Single, Shared Source of Truth

A DLT is a database replicated and synchronized across a network of computers (nodes). Each participant has an identical copy of the ledger. Every new transaction is broadcast to the network, validated by a consensus algorithm, and then added as a block to the chain. According to Gartner, 2025, over 80% of corporate DLT projects will use permissioned blockchains, better suited to the banking regulatory framework. This architecture eliminates the single point of failure and makes any retroactive data alteration practically impossible without collusion from the majority of the network.

1.2 Consensus Algorithms: The Heart of Democratic Validation

Consensus is the mechanism by which the network agrees on the validity of transactions. It replaces the central authority.

Enterprise Consensus : Algorithms like PBFT (Practical Byzantine Fault Tolerance) are favored in private blockchains (Hyperledger Fabric, Corda). They are extremely fast and efficient for a known number of participants, ensuring the network functions correctly even if up to one-third of the nodes are malicious or faulty.

The value of blockchain lies not in its raw speed, but in its inherent robustness and auditability. For a bank, the choice between a public, private, or hybrid (consortium) blockchain is strategic. Consortiums, like the Contour project (formerly Voltron) for trade finance, are gaining traction as they combine the benefits of decentralization with the control required by the sector.

Recommendations: Begin with a thorough assessment of your use case. Blockchain is not the solution to every problem. Ask yourself: does the process involve multiple independent parties that do not fully trust each other? Does it require an immutable and verifiable sequence of actions ? If the answer is yes, then a proof of concept (PoC) on a consortium blockchain like Hyperledger Fabric or Corda is a pragmatic first step. Invest in training your DevOps teams to manage these new infrastructures.

2. Securing and Automating Transactions with Smart Contracts

Blockchain ensures trust through its decentralized nature, which prevents data falsification :

Immutability: Once recorded, transactions cannot be altered or deleted.

Advanced Cryptography: Ensures the authenticity and confidentiality of exchanges.

Distributed Consensus : Collective verification, avoiding the centralization of power.

IBM reports a reduction in fraud of over 35% in financial institutions integrating blockchain in 2025. However, Deloitte highlights certain risks such as vulnerabilities in smart contracts that require vigilance and regular auditing.

While blockchain significantly improves security, its adoption must include proactive management of risks related to new forms of attacks.

Smart contracts are self-executing programs run on a blockchain, enabling the automation of contractual agreements without human intervention. In the financial sector, they are used to automate processes such as payments, loans, insurance, and securities management. According to PwC, integrating blockchain and smart contracts into real-time payment systems offers benefits in terms of traceability and enhanced security.

Recommendation: Invest in secure smart contract development, combined with regular penetration testing and ongoing technological monitoring.

3. Strengthening Traceability and Regulatory Compliance

3.1 AML/KYC Compliance and Self-Sovereign Identity (SSI)

Know Your Customer (KYC) and Anti-Money Laundering (AML) processes are redundant and costly. A digital identity verified on a blockchain (a Self-Sovereign Identity or SSI) would allow a client to share their verified identity information only once with a consortium of banks. Bank A performs the KYC and issues a verifiable credential on the blockchain. Bank B can then, with the client’s consent, access this proof without repeating the entire process. Capgemini estimates this could reduce compliance costs by 30 to 50% for financial institutions.

Blockchain traceability is not just an efficiency gain; it is a competitive advantage that enables the creation of new products.

According to PwC, blockchain is used to enhance the traceability and security of payments, particularly in real-time payment systems.

Recommendation: Implement a « Security-First by Design » approach for all your projects and adopt blockchain-based solutions to improve the traceability and regulatory compliance of your operations, especially in sensitive sectors.

4. Web3: Catalyst for Data Sovereignty and Security

Web3, as a decentralized evolution of the web, offers financial actors increased control over their data and digital interactions. It integrates technologies such as blockchain, decentralized identities, and decentralized applications (dApps), enabling more secure and transparent data management. Capgemini emphasizes that Web3 is transforming financial services by introducing new models of ownership and governance.

Recommendation: Nexfing advises you to explore Web3 solutions to strengthen data sovereignty and security in your digital operations, particularly to meet strict regulatory requirements.

5. New Economic Models with Web3

5.1 Asset Tokenization

Real estate, stocks, digital assets → divisible and exchangeable via tokens.

Facilitates small-scale investment and access to international markets.

5.2 Decentralized Finance (DeFi)

Peer-to-peer (P2P) lending, exchanges, and insurance without centralized intermediaries.

Automated protocols via smart contracts (e.g., Aave, Compound).

5.3 Financial Inclusion

1.7 billion unbanked individuals could access financial services via Web3 wallets.

Reduced costs and delays for international transfers.

Increased flexibility and speed, but a need to prepare for regulation and cross-chain interoperability. According to PwC, 25% of financial institutions will integrate these hybrid models by 2025.

These models offer flexibility, speed, and cost reduction but raise questions of regulation and interoperability.

Recommendation: Targeted Web3 pilots, proactive collaboration with regulators, gradual integration with existing banking systems.

Assess relevant use cases for your institution

Conduct a comprehensive business process analysis to identify high-impact opportunities where blockchain and Web3 can deliver measurable value. Focus on processes that currently suffer from reconciliation inefficiencies, require trusted data sharing between multiple parties, or involve complex audit trails. Prioritize use cases that align with your strategic objectives and offer clear ROI potential, such as cross-border payments, trade finance, digital identity management, or tokenization of high-value assets.

Hybrid architecture : private blockchain + public Web3 for client interactions

Implement a dual-layer architecture that leverages private, permissioned blockchains for internal operations and sensitive business data, while utilizing public Web3 infrastructure for customer-facing applications. This approach maintains regulatory compliance and data privacy for core operations while enabling global accessibility and interoperability through public networks. Ensure seamless integration between both layers through secure bridges and APIs, allowing for efficient data flow while maintaining appropriate security boundaries.

Regulatory compliance : integrate from the start

Establish a regulatory compliance framework specifically designed for blockchain and Web3 technologies from the initial planning phase. Engage with legal experts to ensure alignment with evolving regulations including AML/KYC requirements, data protection laws (GDPR), and financial services regulations. Implement compliance monitoring tools that can track transactions across both private and public networks, and design systems with built-in regulatory reporting capabilities to simplify audit processes.

Continuous security and audits : smart contracts, penetration tests, SOC blockchain

Develop a comprehensive security protocol that includes regular smart contract audits by independent security firms, periodic penetration testing of the entire blockchain infrastructure, and implementation of Security Operations Center (SOC) capabilities specifically for blockchain monitoring. Establish automated monitoring systems to detect anomalous transactions and potential security threats in real-time, and maintain a rigorous patch management process for all blockchain components.

Expert support to steer the digital transformation

Engage specialized blockchain consultants and technology partners who can provide strategic guidance throughout the implementation journey. Build an internal center of excellence while leveraging external expertise for specific technical challenges. Develop a phased adoption roadmap that includes proof-of-concepts, pilot programs, and full-scale implementation stages, ensuring knowledge transfer at each phase to build internal capabilities progressively.

Blockchain and Web3 are not just technologies : they represent a strategic opportunity to:

Strengthen trust and security.

Guarantee traceability and transparency.

Explore new inclusive economic models.

Adopting these technologies with strategy and mastery enables financial institutions to position themselves as leaders of a more agile, transparent, and innovative financial sector.

The migration towards a financial ecosystem integrating blockchain and Web3 is inevitable but complex. To fully leverage the benefits offered by blockchain and Web3, it is essential to :

Adopt a « Platform, not Point Solution » Approach: Do not build isolated solutions. Invest in an internal blockchain platform or join a consortium that can support multiple use cases (trade finance, identity, tokenization).

Prioritize Interoperability: The future is multi-chain. Choose technologies and protocols that allow your different blockchains (public, private) to communicate with each other (via cross-chain bridges).

Invest Heavily in Training and Talent : Develop internal training programs and attract talent.

Drive by Business Value, not by Technology: Every blockchain initiative must be justified by a clear ROI : cost reduction, new revenue creation, risk reduction, or improved customer experience.

Answering our initial research questions :

Trust is reinforced through disintermediation and the mathematical incorruptibility of distributed ledgers and consensus algorithms.

Traceability becomes absolute and transparent thanks to the ledger’s immutability, revolutionizing fields such as Trade Finance and tokenized asset management.

Security is significantly improved at the infrastructure level, but requires increased vigilance at the application layer (smart contracts) and anticipation of future threats (quantum).

Finally, these technologies open up profound new economic models, from DeFi to CBDCs, which will not replace traditional players but will force a reinvention of financial services around principles of transparency, efficiency, and inclusion.

Blockchain and Web3 are not ends in themselves, but the most powerful tools we have to build a more resilient, transparent, and accessible financial system. The question for institutions is no longer if they should engage, but how and at what pace.

By integrating these technologies strategically, financial institutions can not only improve their operational efficiency but also offer new innovative services to their clients.

Want to explore how blockchain and Web3 can transform your financial operations?

Nexfing, leveraging its expertise in IT development, AI, and blockchain, supports you in integrating these technologies to optimize your processes and meet the challenges of the financial sector.

Discover how we can turn these technological challenges into lasting competitive advantages

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Sources :

Gartner :

https://www.gartner.com/en/newsroom/press-releases/2019-07-03-gartner-predicts-90–of-current-enterprise-blockchain

PWC :

https://www.pwc.com/us/en/industries/financial-services/library/instant-payments-blockchain-for-banks.html

https://www.pwc.com/us/en/tech-effect/emerging-tech/tokenization-in-financial-services.html

McKinsey :

https://www.mckinsey.com/industries/financial-services/our-insights

Global Market Insights :

https://www.gminsights.com/industry-analysis/web-3-0-blockchain-market