Blockchain opportunities proliferate across Industries

Many senior executives recognise blockchain as both a business model enabler and a disruptor. As competitive pressures heat up, more indicate they plan to explore and ultimately adopt the technology.

While many organisations have dipped a toe into the blockchain waters, the most dramatic progress is being made by organisations that have jumped into the deep end of the pool with the decentralised, distributed ledger technology. Instead of concentrating on how to use blockchain to support a specific product or idea, some are focusing on evolving the technology itself, according to respondents to Deloitte Consulting LLP’s 2018 global blockchain survey, which polled 1,053 senior executives across seven countries.¹ Here are some industry-specific perspectives on blockchain familiarity, potential barriers, ecosystem considerations, and use cases ripe for exploration and deployment.

Financial Services

Financial services was one of the first industries to explore blockchain. After years of considering the technology something of a curiosity, many executives now view it as both an opportunity and a threat. According to the survey, 38 percent of responding industry executives are getting educated on blockchain, while 49 percent are experimenting and 11 percent are already deploying it for their business.

Blockchain could help financial organisations to fundamentally redesign the ways they interact with regulators, customers, and each other. Historically, industry use cases have included trade finance, customer onboarding, regulatory reporting, and crossborder payments. Now, many leaders are shifting their focus from efficiency and cost savings to a broader portfolio of applications designed to produce new revenue streams, including crypto-trading services, loyalty programs, and securities-lending services.

According to the survey, 37 percent of responding financial services organisations have already spent at least $5 million on blockchain initiatives. As global institutions build blockchainfocused teams and internal investment increases, some organisations are also accessing blockchain capabilities by acquiring startups less constrained by legacy technologies, operating systems, or business models.

Still, financial services leaders recognise blockchain is not without its challenges. Scalability is an important consideration for larger institutions, as is security in such a heavily regulated industry: Eighty-four percent of all survey respondents believe blockchainenabled solutions will be more secure but remain unclear about new threats that may develop.

The financial services industry is at the tipping point of critical change, with live and in-production blockchains emerging and regulators closely following these developments. Those who understand the opportunities and challenges of blockchain are well-positioned to make the best use of the technology.

Technology, Media, Telecommunications

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Technology, media, and telecommunications organisations have been approaching blockchain differently and at varying paces. Many technology companies are already incorporating blockchainbased tools into their offerings, while telecoms are actively experimenting with blockchain, and media and entertainment companies are considering potential uses and associated revenue streams. Overall, 40 percent of responding industry executives are getting educated on blockchain, while 39 percent are experimenting and 20 percent are using it in their business, according to the survey. Forty-one percent of respondents say their organisations have already spent at least $5 million on blockchain initiatives.

A better understanding of blockchain’s capabilities and the nuances of effective architecture are motivating many industry leaders to act. They are beginning to see that blockchain can help to establish more rigorous trust and transparency between customers and the businesses that serve them, among other benefits.

More specifically:

In the technology sector, companies will likely continue to adopt blockchain while steadily applying its capabilities to their own IT systems. For example, some cloud providers are adding blockchain development tools to their platform service offerings, and some chipmakers are creating specialised graphics-processing units and application-specific integrated circuits with blockchain in mind.

For media and entertainment companies, blockchain can help track and monetise content, address piracy, and manage digital assets from creator to consumer. For example, the processes of tracking content usage and returning royalties to rights holders is increasingly difficult in digital economies, and revenue losses from piracy and unauthorised use can hurt creators and media businesses. Blockchain could underwrite a new framework for identifying, recording, and settling content interactions.

In the telecom industry, blockchain can simplify billing systems, decrease roaming fraud, create decentralised and immutable records for accounting and audits, and enable more dynamic and flexible next-generation network services. Using the technology, telecom operators could ultimately sell identity-as-a-service for customers and connected devices.

Startups and independent consortia are also working to develop blockchain solutions for identity, value exchange, and open models that anchor content rights to creators. Such efforts could potentially let some companies step back from a strong role in identity and content management.

A better understanding of blockchain’s capabilities and the nuances of effective architecture are motivating many industry leaders to act. They are beginning to see that blockchain can help to establish more rigorous trust and transparency between customers and the businesses that serve them, among other benefits.

***** As blockchain possibilities grow clearer, even senior executives without a completely solid business case to implement can, at the very least, keep an eye on the technology so they are prepared to take advantage of industry-specific opportunities as they present themselves.

Endnotes

1. The survey was commissioned by Deloitte Consulting LLP and conducted online between March 26 and April 5, 2018. The survey polled a sample of 1,053 senior executives in seven countries (Canada, China, France, Germany, Mexico, the United Kingdom, and the United States) at companies with $500 million or more in annual revenue. Respondents had at least a broad understanding of blockchain and were familiar with and able to comment on their organisations’ blockchain investment plans. CIOs and CTOs represented 26 percent of respondents.

For more information,

please visit www.deloitte.com/mt/blockchain