Blockchain Technology has become the solution to several problems in the world today.
Blockchain is a system that can be trusted and transparent without being manipulated easily and thus is helping critical industries that are becoming inefficient.
Here are the top industries that are using Blockchain to its advantage –
Smart contracts help the Insurance industry.
A smart contract is defined as a digital legal binding document which helps secure relationships between buyers and sellers or any two parties.
Insurance industries rely heavily on manual work which leads to three main essential problems-
- High Administrative Costs
- Slow Payments (which can sometimes take months) to Insurance Holders
- Errors and Manipulations due to Humans being involved
Smart contracts of Blockchain technology helps automate the existing system. Thus inputs such as the terms of the insurance are clearly outlined and when triggered will follow an immediate payment to the insurance holder.
Example- If an Insurance Holder, has an accident it will trigger one of his policies. The severity of the accident will also be specified leading to a more accurate insurance amount being paid immediately.
Exports and Imports
International trade has been increasing tremendously with the demand of people becoming higher and higher every day. Thus the documentation for exports and imports have become more complicated and time-consuming.
Thanks to Blockchain technology, draft contracts between the two parties (Buyer and Seller) can be made more efficient and trustworthy through smart contracts.
Overall there are many advantages-
1) Low Costs as middlemen who handle documentation is cut down
2) Communication is more trustworthy and clearer
3) Funds are transferred at the right time when the process is followed
HSBC and ING were actively involved in using Blockchain for a bulk shipment of soybeans which was shipped from Argentina to Malaysia. The Blockchain Process simplified the whole process and ensured commitments such as payments were met within a day compared to the entire process which takes more than a week.
Logistic industry relies on efficiency, speed, and trust. Blockchain helps improve all three factors.
Blockchain helps track goods more efficiently thanks to the transparency which allows a customer figure out where the item he ordered is in currently.
Thus customer care of logistic operators will not have the same repeated questions of panic and anger from clients anymore.
Even high valued items such as diamonds can be entrusted to be sent from point A to point B in a matter of few days thanks to Blockchain’s efficient tracking system which ensures no fraud takes place.
Overall costs reduce drastically as intermediaries in the supply chain are cut out. As a whole, the logistic company which employs the Blockchain system will gain more customers thanks to the trustworthiness it creates and efficiency it delivers.
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