An evaluation of blockchain technology in enhancing cost control: A case study of Nigerian Stock Exchange
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Background of the Study
Blockchain technology, first introduced as the foundation of cryptocurrencies like Bitcoin, has evolved into a powerful tool for various sectors, including finance, healthcare, and supply chain management. It provides a decentralized, transparent, and secure way of recording transactions, which is ideal for enhancing trust and reducing the risks associated with traditional centralized systems (Ekanem & Olaniyi, 2024). In the financial industry, blockchain technology has the potential to revolutionize operations by streamlining processes, reducing operational costs, and improving transparency. The Nigerian Stock Exchange (NSE) plays a significant role in the country’s economy, facilitating capital formation and providing a platform for investors. Given the critical role of cost control in stock exchange operations, exploring how blockchain can help reduce inefficiencies and enhance financial control is essential.
The adoption of blockchain technology at the NSE has the potential to significantly improve operational processes such as trade settlement, data security, compliance, and auditing. It can reduce the costs related to intermediaries, transaction verification, and manual processes while enhancing the speed and accuracy of financial operations (Ibrahim & Nwachukwu, 2025). Despite the promising advantages, the integration of blockchain technology into Nigerian financial systems faces challenges related to regulation, technology adoption, and organizational readiness. This study explores how blockchain technology can be utilized to improve cost control in the Nigerian Stock Exchange, offering insights into its practical applications and the barriers to its adoption.
Statement of the Problem
The Nigerian Stock Exchange, like many other financial institutions, faces significant challenges in managing operational costs, ensuring transparency, and maintaining trust among investors. Despite technological advancements, inefficiencies in transaction processing, regulatory compliance, and reporting continue to affect the exchange’s overall cost management. Blockchain technology, with its promise of cost-effective and secure solutions, has not been fully explored in this context. This study seeks to evaluate the potential of blockchain technology in enhancing cost control at the NSE, identifying key areas where blockchain could lead to cost savings and improved operational efficiency.
Objectives of the Study
- To evaluate the effectiveness of blockchain technology in reducing operational costs at the Nigerian Stock Exchange.
- To identify the potential challenges and barriers to blockchain implementation in cost control at the NSE.
- To assess the impact of blockchain technology on the transparency and efficiency of financial transactions at the Nigerian Stock Exchange.
Research Questions
- How does blockchain technology enhance cost control at the Nigerian Stock Exchange?
- What challenges does the Nigerian Stock Exchange face in adopting blockchain technology for cost control?
- How does blockchain technology improve the transparency and efficiency of financial transactions at the NSE?
Research Hypotheses
- H₀: Blockchain technology does not significantly reduce operational costs at the Nigerian Stock Exchange.
- H₀: The Nigerian Stock Exchange does not face significant challenges in adopting blockchain technology for cost control.
- H₀: Blockchain technology does not improve the transparency and efficiency of financial transactions at the Nigerian Stock Exchange.
Scope and Limitations of the Study
This study will focus on the Nigerian Stock Exchange and its potential use of blockchain technology to improve cost control and operational efficiency. Data will be collected from interviews with financial experts, surveys of NSE participants, and analysis of blockchain case studies in financial sectors. Limitations include the potential reluctance to adopt new technologies, regulatory challenges, and the availability of detailed financial data from the NSE.
Definitions of Terms
- Blockchain Technology: A decentralized, digital ledger system that records transactions across multiple computers in a way that prevents tampering.
- Cost Control: The practice of managing and reducing expenses to increase profitability.
- Operational Efficiency: The ability of an organization to deliver products or services in the most cost-effective and resource-efficient manner.
- Transparency: The clarity and openness of an organization's operations, particularly in financial transactions and reporting.
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