Could blockchain revolutionise every industry?
Accenture's Sander van 't Noordende explores how the technology can be applied for greater efficiency and transparency
Much has been written about blockchain and how distributed ledger technology (DLT) could revolutionise a range of areas from money exchange to voting. It has impacted company valuations when it has simply been added to a business’s name, as shown by a diverse set of companies including an iced tea-maker, an IT investor and a telco buyout firm. But can it make as big an impact as many are claiming, and will this impact go beyond banking?
The answer is yes. In simple terms, blockchain technology can have an impact in any situation where ‘many to many’ transactions are taking place. That’s because it provides an efficient and rapid solution, and easier integration for any party that needs to be added to the process or transaction.
It has seen lots of scrutiny because it is the underlying technology for the cryptocurrency Bitcoin, itself a headline-grabbing subject. As a result, early applications have focused on financial services. But the technology has now gone far beyond these parameters to applications including identity, healthcare, telecom and media. I firmly believe that virtually every industry will likely see some application of blockchain.
Shipping made simpler
At its most basic level, blockchain is a new type of database system that maintains and records data in a way that allows multiple stakeholders to securely share access to the same data and information.
Blockchain is protected by cryptography, a level of security that allows a network of nodes to collectively maintain a shared ledger of information without the need for complete trust between the nodes. This mechanism guarantees that, as long as most of the network validates the entries (i.e., the “blocks”) posted to the “chain”, the information stored can be trusted. In many instances, intermediaries will no longer be needed to verify, record and coordinate transactions.
The freight and logistics industry could save hundreds of millions of dollars by replacing physical documents and using blockchain technology
Today we are seeing a range of industries successfully trialing blockchain. In the shipping industry, an international shipment of goods typically requires more than 20 documents, many of which are often paper-based, to enable the goods to move from port to port. Across these documents, up to 70 percent of the data can be replicated. The document heavy approach limits data quality and real-time visibility to all parties involved in the trade and this can also delay the financial settlement on goods.
A consortium has successfully tested a blockchain solution that can eliminate this need for printed shipping documents. Accenture, AB InBev, APL, Kuehne + Nagel and a European customs organisation have demonstrated how the freight and logistics industry could save hundreds of millions of dollars by replacing physical documents and using blockchain technology. The relevant data is shared and distributed under single ownership principles which is determined by the type of information.
This faster, more efficient approach reduces the requirement for data entry by up to 80 percent, simplifies data revisions across the shipping process, streamlines the checks required for cargo and reduces the burden and risk of penalties for customs compliance levied on customers.
More transparent supply chains
Any industry would clearly benefit from a supply chain where the complete history of a product is available from the source of origin of the raw material, through the various stages within production until the arrival at the final point of consumption. Ultimately this blockchain based approach can give supply chain participants more comprehensive track-and-trace capabilities than have been previously available – companies can use this information to provide proof of legitimacy of products.
For consumer goods companies and retailers, this type of approach could help tackle the issue of counterfeiting.
This type of approach could help tackle the issue of counterfeiting... It could also help deliver improved consumer safety
But the blockchain technology could also be used to enhance data management, driving higher-quality actionable insight. It could also help deliver improved consumer safety, as investigations into food-borne illnesses can be undertaken in seconds rather than weeks.
The inherent security of blockchain — which enables multiple stakeholders to securely share access to the same information, with encryption making it virtually impossible to change a “block,” or data set — makes it the perfect solution to promote trust among all the parties involved, from the individual traveler to national governments, border-control agencies, airlines and airports and hotels. In fact, Marriott is among one of the first businesses to recognise the way in which this technology could help revolutionise the experience for its customers.
So where will we next see blockchain being applied?
There are announcements being made regularly about potential applications, one of the latest being for the automotive industry. I am sure that any industry reliant on ‘many to many’ transactions will start to see applications of blockchain to make improve efficiency.
The addition of increased security and trust can be of benefit to all, while reducing friction and pinch points that cause frustrations for customers.
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