Hundreds of potential blockchain use cases are emerging in many industries, leading to large investments in distributed ledgers and smart contract implementations that involve money, health records, property records and supply chain data. Leaders across industries say blockchain could bring solutions that would disrupt current business models and create new ones.
How are organizations reacting to this new technology and its enormous potential? The IBM Institute for Business Value (IBV) is publishing a series of reports to find out. In the seven industries we have explored so far, a distinctive group called the Trailblazers has emerged. The Trailblazers expect to be in production in a year and they provide insight into blockchain adoption in each industry. Here’s what we have learned from Trailblazers in each industry:
Banking Trailblazers say they are most concerned with operational improvements such as time, cost and risk benefits to their current business models, which include use cases for reference data, retail payments and consumer payments. Blockchain also could expand opportunities in trade finance and corporate lending. Banking Trailblazers are prolific across all major geographies. This may imply that large banks recognize the importance of swift adoption and first-mover advantage.
Most Trailblazers identified component provenance, supply chain management, warranty management and regulatory compliance as the primary use-cases. Since supply chains in this industry are global and require involvement from multiples of firms, Trailblazers are open to collaboration and building truly distributed networks. They also recognize that first-mover advantage will allow firms to dictate the blockchain of choice for other network participants.
Unlike Trailblazers in banking and electronics, seven in ten healthcare Trailblazers see blockchain as an impetus for new business models as opposed to an opportunity to grow existing business models. Those new business models include treatment adherence and event safety and medical device monitoring, such as integration with Internet of Things (IoT). Healthcare Trailblazers are the only group of to prioritize blockchain integration with hardware and the IoT. Another prominent goal for Trailblazers in healthcare centers around accessibility to information and a reduction of information risk. The three largest populations of Trailblazers are based outside the western world: 29 percent are in Latin America, 27 percent are in the Middle East and Africa, and 18 percent are in the Asia-Pacific region. This could imply that healthcare companies in developing nations see a benefit in skipping over traditional IT infrastructure and moving straight to cutting-edge technologies.
Trailblazers in financial markets are very much like their counterparts in banking. They see a tremendous first-mover advantage. Their use cases focus on improving decision-making by reducing information risk, increasing accuracy and availability of information, and increasing transparency. This can lead to the creation of new profit pools. Half of the Trailblazers see new business models arising in capital markets, specifically in clearing and settlements, payments, and know-your-customer. Trailblazers in financial markets are open to working with regulatory bodies to define the direction of this technology.
Trailblazers in government identify the benefits of blockchain but are often stifled by self-imposed barriers to adoption, such as regulatory constraints, undefined ROI, and lack of buy-in from their counterparts. However, governments that have nationalized a majority of the private industry in their territories can overcome those barriers. Another interesting pattern is that use cases in this sector vary by geography. For example, Trailblazers in Latin American governments say they have invested in identity management and citizen services use cases. But those in North America have focused on financial transactions and border services. Geographical differences can be attributed to the development of technological infrastructure and the feasibility of skipping over traditional IT and moving straight to new technologies.
Across retail and consumer products, we found that while there were fewer Trailblazers expecting to be in production in a year, a group of First Movers are already working on and actively investing in blockchain applications for the consumer industry. These First Movers expect to use blockchain to gain entry to otherwise inaccessible consumer markets. They also recognize the opportunities blockchain brings to both the operational aspects of their business as well as to consumer interactions. While First Movers expect benefits in areas such from product safety and authenticity to promotional strategy management, executives in the consumer industry ranked the shortage of skills as their biggest barrier to implementing blockchain.
Similar to the consumer industry, First Movers in life sciences are already working on and investing in blockchain and expect to achieve greater information accuracy and enhance collaboration across a very complex ecosystem. They expect improvements across regulation and compliance, patient empowerment and end-to-end serialization. Interestingly, more than five in ten First Movers see blockchain’s disruptive potential across three completely unique areas: revenue management, adverse event management and outcome based management.
Blockchain innovation is accelerating and advancing disruption in all industries. Read the full reports to learn how your industry is responding. And stay tuned as we release reports on more industries in the coming months.