Next Generation Financial Services: Role of Blockchain enabled Federated Learning and Metaverse

Abstract

Due to the COVID-19 pandemic and rapid digital transformation in financial institutions, cyberattacks, and data breaches are spiking and becoming more targeted and prevalent. According to media sources, banks received the most malware in 2019. Ransomware, phishing assaults, credit card fraud, and bank account hacks pose the highest risk to the financial sector. The growing number of ways cyber and physical security risks overlap is worrying. Digitalized operational and security solutions are becoming standard across sectors. This paper presents how blockchain technology and Federated Learning (FL) influence financial services to improve the privacy, security, and trust of integrated cyber-physical systems (CPS) in the financial sector. First, an overview of financial services applications is provided in detail. Then, how federated learning (FL) can incorporate blockchain for financial services is presented. It has also been pointed out how the metaverse and digital twin can help improve the financial services ecosystem. Finally, some future research challenges have been included to provide some insights to the researchers and industries about how to enhance the security, trust, and privacy of CPS integrated into financial services using blockchain, FL, and Metaverse.