Blockchain Security and Financial Transaction Trust: The Mediating Role of Data Integrity and the Moderating Role of Regulatory Compliance

Abstract

It's a study on financial transaction trust for banking and fintech players, with the data integrity as mediator and the regulatory compliance as moderator in the relation between these two. The design of the research is aimed at explaining and quantitative research paradigm. For the study they were sampled banking profession, fintech profession, compliance profession and IT security profession and the combined total respondents were 412 subjects with multi-stage purposive sampling method for collecting the data for the study from the subjects. The analysis was done in several steps: First data screening of missing data; outlier, violation of normality; second data by validating measurement model using Confirmatory Factor Analysis (CFA); finally data solving by Partial Least Squares Structural Equation Modeling (PLS-SEM) with 5000 bootstrap resamples in the software of smartPLS 4.0. The Standardized Root Mean Square Residual (SRMR) was used to assess model fit and predictive relevance was assessed using blindfolding model identification (Q2) values. Data integrity and financial transactions trust were partially mediated (indirect effect β = 0.241, p < 0.001) or completely mediated (indirect effect β = 0.312, p < 0.001), respectively, for security of blockchain on financial transactions trust.Data integrity and financial transactions trust were partially mediated (indirect effect β = 0.241, p < 0.001) or completely mediated (indirect effect β = 0.312, p < 0.001), respectively, for security of blockchain on financial transactions trust. The moderation analysis results reaffirm that the impact of blockchain security on magnitude of trust for financial transactions holds when the regulatory compliance frameworks in the financial sector are robust enough (interaction β = 0.187, p < 0.01). The study offers guidance on the adoption way, design of financial regulation and digital trust management for the dynamic fintech industry.