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Blockchain In 2019 – How Will It Impact Industries
Here are the five key industries that will ripe major disruptions
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2018 was the year where cross-industry compelling cases gave the confidence that blockchain is not just a passing phenomenon. While there were a number of initiatives at proof of concepts stage, while a few moved into production as well. Blockchain startups attracted nearly $3.9 bn in venture capital investments in the first 3 quarters of 2018, nearly 3 times bigger than whole of 2017. Technology companies are also making headway in ramping up blockchain capabilities. For e.g. IBM has invested $200 mn in blockchain powered Internet of Things. What works in favor of blockchain is the number of services that can be improved upon ranging from recordkeeping, registration of transactions, document management, supply chain management, and identity management. Its benefits can be reaped by all kinds of businesses across industries ranging from recordkeeping, registration of transactions, document management, supply chain management, and identity management. It is further expected to make substantial progress across industries in 2019 and beyond. The 5 key industries that will ripe major disruptions are:
Banking: Today, banks’ core function of verifying information and transferring assets is in alignment with the USP of blockchain. Major pain points in cross border payments and trade finance can be easily solved with the intervention of blockchain as it involves time and cost efficiency without the need of intermediaries. How high the stakes are can be gauged from the fact that nearly 90% of major banks in North America, Europe and Australia are investing in blockchain initiatives. 7 of the largest Indian banks have also signed up for blockchain enabled trade finance initiatives. With this, number of banking activities such as execution of securities transactions, corporate financing, syndicated loans and bond issues are also expected to see the intervention of blockchain. 14 Indian banks that account for about half of the country’s trading volume have already initiated a consortium that aims to develop a blockchain based solution facilitating loans. However, one limitation of blockchain is scalability. Japan’s largest bank Mitsubishi Financial is planning to launch a new blockchain platform in 2019 that will process a million transaction a second
Retail: The retail industry is proceeding cautiously even in planning blockchain based initiatives. In early 2018, French retail giant Carrefour was the first European retailer to have deployed a food tracking platform based on blockchain in its Spanish network. The system was used to track free-range chickens raised without antibiotics. 2019 will see fair traction in blockchain adoption as retailers will fully realize the benefits of blockchain across supply chain, fraud prevention and transforming back offices. Counterfeit products are one of the biggest worries especially in luxury retail, pharma and electronics. By placing tags on goods and recording them in blockchain database, retail companies will enable customers to check out the authenticity of goods at any moment. Supply chain transparency, security and visibility will get a new boost resulting from Interaction of IoT with blockchain; that will ensure foolproof tracking and reporting on real time basis. Walmart is also planning to roll out blockchain based farm to store tracking system by Sep 2019.
Healthcare: Healthcare industry is plagued by disparate data systems, prone to thefts that adversely affects patient service and experience. Blockchain will allow to transform this industry by facilitating a smooth data exchange across healthcare providers, insurers, patients and clinical researchers. Nearly 70% of the health insurers in the US are planning to have blockchain technology integrated into their systems in 2019. Commercial deployment of blockchain is also anticipated in 2019 with nearly 5-10% of healthcare focused initiatives expected to move from pilot stage to commercial availability. It will be combined with IoT sensors to ensure utmost efficiency in storage and distribution of drugs, blood and organs. Patients will also be able to monetize their data by charging pharma companies for using their information in drug research.
Manufacturing: Blockchain is expected to redefine manufacturing business model by impacting operations across supplies, sourcing, procurement, and machine monitoring. Application of this technology will allow to improve supplier order accuracy, product quality and tracking, hence enabling manufacturers to meet delivery deadlines, improve product quality and increase sales. It will help create unalterable digital ID for automotive products and reduce the problem of counterfeit products, streamline servicing, and also ensure highly targeted vehicle recalls. It will further make compliance reporting demands easier, faster and less expensive. As per Gartner, by 2023, 30% of manufacturing companies with more than $5 billion in revenue will implement Industry 4.0 pilot projects using blockchain, up from less than 5% in 2018. Automobile industry in India is also planning to use blockchain for AutoDX, a cloud-based platform for invoices, purchase orders and shipping notices for 60 automobile companies.
Public Sector: Blockchain will effect substantial savings, security and efficiency in maintenance of records and delivery of citizen friendly services in the coming year. Data on citizens will be siloed across departments across birth and death details, property registration, marital status, business licensing, taxes and criminal activities. These foolproof records will simplify interaction with citizens enabling an inclusive society. In addition to this, Government agencies are also testing blockchain based smart contracts to reduce costs of verification, execution, arbitration and fraud prevention. In 2018, 45 countries were running over 200 blockchain initiatives to effectively deliver public services. Indian govt’s think tank NITI Aayog is working on building the country’s largest blockchain network, IndiaChain, to reduce frauds, speed up enforcement of contracts, and increase transparency of transactions. Blockchain market for public sector is set to grow from $162 mn in 2018 to $3.5 bn by 2023.
Blockchain in the coming year will have a wide impact across functions and industries and people. The industry will witness plenty of blockchain based projects move from test to live stage. With the advent of internet, no other technology than blockchain has had the potential to change the world for the better. The initial skepticism that this technology is a solution looking for a problem has given a way to a number of use cases demonstrating substantial benefits in terms of foolproof security, time and money saved. All the industries are showing a very positive outlook towards more investments in blockchain initiatives. The big companies are currently taking the lead in ramping up blockchain capabilities, however with the developed ecosystem so being developed it will soon benefit all types of companies.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.