Secure Banking System Using Blockchain Technology

Abstract: This synopsis presents a practical and secure online banking prototype that blends a traditional relational database with a private blockchain ledger. The goal is to improve integrity, transparency, and auditability of banking transactions without compromising usability or performance. The work starts by tracing the evolution of digital banking-from branch-led paper systems to ATMs, online and mobile banking-highlighting how centralization remains a single point of failure and a lucrative target for attackers. It then introduces blockchain as a distributed, append-only, tamper-evident ledger, and explains how its built-in cryptography and consensus mechanisms create a powerful audit trail for financial records. The proposed system anchors every transaction to a private blockchain (for immutability) while keeping sensitive customer data in an ACID-compliant PostgreSQL database (for privacy and performance). A two-password security flow-static MPIN for login and OTP for authorizing each transaction-helps reduce account takeover risk. The prototype is built with Python (Flask), uses Proof of Work (PoW) for demonstration, and includes an admin dashboard with a blockchain explorer. Testing shows responsive user interactions via asynchronous mining, and the roadmap outlines a move to permissioned consensus (PBFT/IBFT) for scale. Overall, this hybrid approach offers banks a credible, evolutionary path to stronger security, more efficient auditing, and faster reconciliation with familiar tools and user experiences.