At present, the majority of banking systems are housed on centralized databases, making them more susceptible to cyber-attacks since all the information is stored in one place, and some banking systems are out-dated and susceptible to new forms of cyber-attacks.
Given that the distributed ledger technology stores, encrypts and verifies every single bit of data in a transaction, any data breach, fraudulent activity, or trades with flagged entities would be made immediately obvious to all parties who have permission to access the data on the ledger.