Six Industries Benefiting from Blockchain Technology
After thousands of proof-of-concepts, blockchain technology has evolved from concept to reality. Organizations are now more confident taking their first steps on their adoption journey, and in turn, it is expected to make a significant impact on the economy. According to a World Economic Forum survey report, 10% of global domestic product (GDP) will be stored on blockchain technology by 2027. Benefits like decentralization, transparency, trust, immutability, high availability and security are much appreciated and have long been expected by many industries, especially those that deal with data and transactions.
However, there are specific industries that will experience the most immediate benefits using blockchain technology. They consist of use cases where improving current business processes raise organizations to a new level:
1.Trade finance. Paper-heavy world of global trade is an industry full of inefficiencies and easily susceptible to fraud. Financial organizations were among the first to pilot projects with distributed ledger technology. As a result, they accelerated processing time for issuing letters of credit from days to hours and developed self-executing contracts on blockchain. Additionally, identity and reputation management (the keystone of any trade cooperation) also improve. Currently, nine out of 10 major banks in North America and Europe are exploring the use of this technology for payments, an Accenture survey finds. Financial institutions can use blockchain to track the trustworthiness of organizations with an immutable historical record of deals.
2.Healthcare. According to the Institute of Medicine, about 30 cents of every healthcare dollar is wasted on needless administrative fees, medical fraud, excessive paperwork and other waste. Blockchain may not be the elixir for age-old problems, but it has great potential to save billions by optimizing current workflow and business processes. Examples include:
- Personalized treatment and data management: medical data is no longer isolated in one place, and a patient with all his current and potential healthcare providers can use it without duplicating medical tests (e.g. X-ray examination) if they had a common blockchain application.
- Drug traceability: according to health research funding organization, the global counterfeit drug market is worth about $200 billion annually. It causes financial losses to original manufacturers, but a major problem is fake products can be very different from the original and therefore poses a threat to buyers’ health. With blockchain, drug traceability would be coded and monitored in its journey from the producer, to the wholesaler, pharmacist, transaction, then finally to the patient.
3.Education. Blockchain solves problems associated with security, data availability and traceability. It guarantees a secured data source containing a record of each student’s individual data, which can also provide the proof of learning. All involved stakeholders own the data: students, teachers, parents, colleges and potential employers.
4.Legal. One of the main buzzwords around legal-tech is “smart contracts.” With it, execution of legal agreements is done automatically. Other areas, such as intellectual property and chain of custody, are also improved by using blockchain, especially with the use of digital files.
5.Insurance. Insurance experts expect blockchain will touch a number of areas: underwriting, customer on-boarding, travel and life insurance, personal accident insurance, surety insurance, peer-to-peer insurance and claims processing. In healthcare, for example, a doctor could submit a claim to the insurer’s blockchain – this action starts a smart contract, which is programmed inside business rules, revises the claim and defines a total sum to be paid.
6.Governments. Countries like Estonia, United Arab Emirates, Gibraltar, Netherlands and the US have already applied or are applying blockchain technology. For example, digital identity powered on blockchain infrastructure allows debt collection, online voting, land registry and other services. Citizens simply need to set up their identity in an application, then city or state administrations verify them.
Like all new technologies, blockchain has many obstacles. Chief challenges include the coordination with existing systems and business processes, privacy protection, scalability, processing speed and standardization. Uniting all industries, is being weighed down with paper and unstructured data that slows their business processes and stifles profits. However, the C-suite is often its own adoption challenge.
To overcome these challenges, everyone involved with blockchain implementation, including the C-suite, blockchain-vendors, system integrators or enterprise IT-departments, need to be mindful of how it receives data so it can be leveraged into processes. Much of the data in the above industries are still in paper or unstructured form incoming from multiple electronic formats. Companies need to adopt digitization tools in advance or in parallel to blockchain implementation. Incorporating capture for classification, optical character recognition, natural language processing, text analytics, robotics and artificial intelligence in this digital journey will be necessary to make blockchain a reality in an organization.