It's Time to Build Blockchain Native Businesses
An MBA from Harvard Business School, Vivekdeep has built a successful track record of growing businesses across multiple industries & functions.
Blockchain has been a longtime subject of conversation within business circles—both in India and abroad. However, while the transformative effects of blockchain integration are well-known, widespread adoption has been hampered, to an extent, as corporations have failed to update their view of the industry at large—while others have failed to place blockchain in the context of the “new normal” which has been ushered in by COVID-19. Many blockchain solutions are still treated as piecemeal, ‘bolt-on’ features to existing products. Now, more than ever before, it is both feasible and sensible for enterprises to begin building blockchain solutions into their service offerings from the ground up, generating a new class of products that are ‘blockchain native’, similar to many successful products these days that are built to be cloud native. The premium placed on flexibility, efficiency, and process optimization has never been so great.
COVID-19: A Catalyst Upending the Status Quo
COVID-19 has caused unprecedented disruption to almost every industry—with global markets and businesses experiencing a sharp change in fortunes since the beginning of this year. As international supply chains, travel, and trade fail to rebound—the limitations of traditional business models have become apparent—creating an increasing pressure on businesses to cut costs by streamlining operations and finding new sources of revenue. The potential held by new technologies—such as blockchain, internet of things, and machine learning—is paramount.
In India, we had already begun to see greater digitisation before COVID-19. For example, the government’s Digital India campaign has led to the development of new digital infrastructure for public services and additional governmentsupport given to private and public sector actors to bring their inhouse technologies up to date. This served to preface the now explosive growth in enterprise interest in technological solutions to business challenges and increased appetite for blockchain-enabled business models. In recent months, one of the most common questions I have been asked is how can blockchain be integrated into existing business processes—and what benefits can it offer. The reason for these basic questions is that, for many businesses, the appeal of blockchain has become more and more pronounced as traditional business models have been upended in 2020.
Blockchain—Benefits for Business
Business leaders' increasing interest in blockchain is of little surprise, as the potential for blockchain to facilitate increased transparency,traceability, and simplified transactions is well documented across numerous industries —from traditional finance and supply chain logistics to record-keeping management in both the public and private sectors. There is also much progress being made in the implementation of blockchain to streamline data processing, complicated financial transactions and fraud prevention, along with creating secure identity-verification, KYC, and legal contract dispute settlement frameworks for the digital age.
Big names in international business are already leaning into the blockchain revolution—as they leverage the technology to improve their current operating models and explore an exponentially growing number of use cases. For example, organisations such as HSBC, BNP Paribas, ING, and Standard Chartered have all joined Contour, a digital trade network aimed at unlocking new potential in trade finance by harnessing the blockchain platform, Corda Enterprise.
In India, too, we have seen household names incorporate blockchain into their service offering. Infosys Finacle, for example, has successfully completed a global trial with eighteen banking groups for the blockchain based trade
finance applications with a 100 percent approval rating from members—who said they would recommend the pilot to industry peers. Bharti-AXA, meanwhile, has deployed blockchain-backed solutions to reduce claim management costs—its motor insurance claim solution on R3’s Corda has led to reductions of up to 20 percent on claims management. Federal Bank, meanwhile, one of the nation’s leading financial service providers, is developing a cross border remittance application to streamline payments and remittance processes and bring greater
confidentiality, privacy, and safety to Federal Bank’s business transactions.
Barriers to Entry and the Road to Adoption
If blockchain presents so many numerous benefits, and has received backing from household names and industry leaders—why, then, do corporations still lag in adopting this proven technological solution? The answer—many decision makers are still not confident that blockchain can shoulder the burden of their end-to-end business processes. While this may have been a valid concern one-two years ago, the blockchain industry has been rapidly maturing, and many of the old limitations of blockchain are no longer relevant. Indeed, well-established blockchain myths—particularly those pertaining to its processing speeds and the necessity for entire industries to adopt the technology to feel its full benefits—have been proven untrue, yet remain in some industry circles and company mindsets.
Additionally, some businesses have been slow to adopt the technology as replacing legacy systems can prove to be a laborious and costly effort. Without external factors creating urgency to overhaul existing systems many companies have procrastinated in bringing their internal systems and operating models up to date. This lack of proactivity in adopting new technologies has only been further compounded by a generalised lack of awareness within decision-making circles of the rate of development which has taken place within the blockchain space in recent years. Many members of the business community still think of blockchain as an underdeveloped ecosystem —as it stood in 2017. Others still do not fully understand what blockchain is—and therefore may fail to perceive
the potential benefits it could offer their business.
In reality, today’s blockchain platforms are enterprise ready—with much higher stability, faster speeds, and well defined support and release cycles. As processing times have decreased—R3’s Corda can process up to 20,000transactions per second—more and more we are seeing blockchain related projects go from siloed innovation departments to underpinning entire business units and there are a growing number of use cases where single organizations are leveraging blockchain within their own organizations to derive value.
The last hurdle pertains to legacy mindsets with organizations. I believe that blockchain should be part of every business process re-engineering conversation within an organization. True blockchain native businesses can only be built when business leaders evaluate their processes and think through how blockchain’s key characteristics – decentralised trust, immutability and automated business flows provide value to their organizations.
If Not Now, When?
As the rate of blockchain maturation continues to gather steam, COVID-19 may well serve as a catalyst for the transformation of businesses across numerous industries. Faced with market turmoil and fierce competition to cut overheads and streamline operations, technological solutions stand out as an obvious means of future-proofing Indian businesses. While business executives may remain reluctant to implement blockchain internally—they face an urgent need for change externally, as the full breadth and scope of challenges presented by COVID have yet to become clear. While blockchain is already showing results for those companies who have made the leap—I would pose one single question to those who remain on the sidelines.
If not now, when?
Blockchain has been a longtime subject of conversation within business circles—both in India and abroad. However, while the transformative effects of blockchain integration are well-known, widespread adoption has been hampered, to an extent, as corporations have failed to update their view of the industry at large—while others have failed to place blockchain in the context of the “new normal” which has been ushered in by COVID-19. Many blockchain solutions are still treated as piecemeal, ‘bolt-on’ features to existing products. Now, more than ever before, it is both feasible and sensible for enterprises to begin building blockchain solutions into their service offerings from the ground up, generating a new class of products that are ‘blockchain native’, similar to many successful products these days that are built to be cloud native. The premium placed on flexibility, efficiency, and process optimization has never been so great.
COVID-19: A Catalyst Upending the Status Quo
COVID-19 has caused unprecedented disruption to almost every industry—with global markets and businesses experiencing a sharp change in fortunes since the beginning of this year. As international supply chains, travel, and trade fail to rebound—the limitations of traditional business models have become apparent—creating an increasing pressure on businesses to cut costs by streamlining operations and finding new sources of revenue. The potential held by new technologies—such as blockchain, internet of things, and machine learning—is paramount.
In India, we had already begun to see greater digitisation before COVID-19. For example, the government’s Digital India campaign has led to the development of new digital infrastructure for public services and additional governmentsupport given to private and public sector actors to bring their inhouse technologies up to date. This served to preface the now explosive growth in enterprise interest in technological solutions to business challenges and increased appetite for blockchain-enabled business models. In recent months, one of the most common questions I have been asked is how can blockchain be integrated into existing business processes—and what benefits can it offer. The reason for these basic questions is that, for many businesses, the appeal of blockchain has become more and more pronounced as traditional business models have been upended in 2020.
Blockchain—Benefits for Business
Business leaders' increasing interest in blockchain is of little surprise, as the potential for blockchain to facilitate increased transparency,traceability, and simplified transactions is well documented across numerous industries —from traditional finance and supply chain logistics to record-keeping management in both the public and private sectors. There is also much progress being made in the implementation of blockchain to streamline data processing, complicated financial transactions and fraud prevention, along with creating secure identity-verification, KYC, and legal contract dispute settlement frameworks for the digital age.
Big names in international business are already leaning into the blockchain revolution—as they leverage the technology to improve their current operating models and explore an exponentially growing number of use cases. For example, organisations such as HSBC, BNP Paribas, ING, and Standard Chartered have all joined Contour, a digital trade network aimed at unlocking new potential in trade finance by harnessing the blockchain platform, Corda Enterprise.
In India, too, we have seen household names incorporate blockchain into their service offering. Infosys Finacle, for example, has successfully completed a global trial with eighteen banking groups for the blockchain based trade
finance applications with a 100 percent approval rating from members—who said they would recommend the pilot to industry peers. Bharti-AXA, meanwhile, has deployed blockchain-backed solutions to reduce claim management costs—its motor insurance claim solution on R3’s Corda has led to reductions of up to 20 percent on claims management. Federal Bank, meanwhile, one of the nation’s leading financial service providers, is developing a cross border remittance application to streamline payments and remittance processes and bring greater
confidentiality, privacy, and safety to Federal Bank’s business transactions.
Barriers to Entry and the Road to Adoption
If blockchain presents so many numerous benefits, and has received backing from household names and industry leaders—why, then, do corporations still lag in adopting this proven technological solution? The answer—many decision makers are still not confident that blockchain can shoulder the burden of their end-to-end business processes. While this may have been a valid concern one-two years ago, the blockchain industry has been rapidly maturing, and many of the old limitations of blockchain are no longer relevant. Indeed, well-established blockchain myths—particularly those pertaining to its processing speeds and the necessity for entire industries to adopt the technology to feel its full benefits—have been proven untrue, yet remain in some industry circles and company mindsets.
Additionally, some businesses have been slow to adopt the technology as replacing legacy systems can prove to be a laborious and costly effort. Without external factors creating urgency to overhaul existing systems many companies have procrastinated in bringing their internal systems and operating models up to date. This lack of proactivity in adopting new technologies has only been further compounded by a generalised lack of awareness within decision-making circles of the rate of development which has taken place within the blockchain space in recent years. Many members of the business community still think of blockchain as an underdeveloped ecosystem —as it stood in 2017. Others still do not fully understand what blockchain is—and therefore may fail to perceive
the potential benefits it could offer their business.
In reality, today’s blockchain platforms are enterprise ready—with much higher stability, faster speeds, and well defined support and release cycles. As processing times have decreased—R3’s Corda can process up to 20,000transactions per second—more and more we are seeing blockchain related projects go from siloed innovation departments to underpinning entire business units and there are a growing number of use cases where single organizations are leveraging blockchain within their own organizations to derive value.
The last hurdle pertains to legacy mindsets with organizations. I believe that blockchain should be part of every business process re-engineering conversation within an organization. True blockchain native businesses can only be built when business leaders evaluate their processes and think through how blockchain’s key characteristics – decentralised trust, immutability and automated business flows provide value to their organizations.
While business executives may remain reluctant to implement blockchain internally—they face an urgent need for change externally, as the full breadth and scope of challenges presented by COVID have yet to become clear
If Not Now, When?
As the rate of blockchain maturation continues to gather steam, COVID-19 may well serve as a catalyst for the transformation of businesses across numerous industries. Faced with market turmoil and fierce competition to cut overheads and streamline operations, technological solutions stand out as an obvious means of future-proofing Indian businesses. While business executives may remain reluctant to implement blockchain internally—they face an urgent need for change externally, as the full breadth and scope of challenges presented by COVID have yet to become clear. While blockchain is already showing results for those companies who have made the leap—I would pose one single question to those who remain on the sidelines.
If not now, when?
