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Blockchain to spawn new business models, processes

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 22 May 2017
Brigid McDermott, IBM VP for blockchain business development.
Brigid McDermott, IBM VP for blockchain business development.

Executives around the globe are counting on blockchain technology to foster a new generation of transactional applications that are designed to establish trust, accountability and transparency, to provide them with a competitive advantage.

This is according to a new IBM study, titled IBM Global C-suit Study: Blochchain which found a third of almost 3 000 global executives surveyed are using or considering blockchain in their business.

The study draws on input from almost 3 000 conversations with C-suite executives across industries on how they intend to operate, generate revenue and respond to customers, partners and competitors alike using blockchain.

According to the findings, eight in 10 of those exploring blockchain are investing either in response to financial shifts in their industry, or for the opportunity to develop entirely new business models.

Historically, the biggest business risk was a competitor with new and disruptive goods or services. Today, new and non-traditional competitors with completely different business models intend to topple the incumbents, adds the study. Around 71% of those actively using blockchain believe industry consortia are important to advance blockchain efforts, while 78% of them believe customers are important to advance blockchain efforts.

"With blockchain, everyone is looking at the same thing at the same time. These new trusted transactions will spawn new business models, processes and platforms where all ecosystem participants can be connected to create new value," says Brigid McDermott, IBM VP for blockchain business development. "Consortia, regulators and innovators will help create new standards across industries and geographies. Early adopters need to move fast to help shape how these platforms evolve."

The biggest strategic advantage of blockchain, according to the report, is enabling business model innovation, which, as one retail CMO from the UK said: "could replace the centralised business model that most companies follow today".

Every blockchain explorer surveyed expects to use blockchain to support a new enterprise strategy. And as blockchain increases trust and transparency across value chains, organisations and individuals will collaborate and compete in ways that can't yet be foreseen, the study reveals.

Yogesh Singh, head of fintech and managed services at Nihilent, says SA has been leading the way in African digital solutions wherein the major banks along with reserve bank, payments association and central depository have come together with an aim to co-create solutions for South African financial services industry.

"Distributed ledger technology has already brought a disruption in the local financial industry. Africa has an opportunity to lead the world in utilising innovative and disruptive technologies. There is a need to work in groups to explore, innovate, share knowledge and experiences around blockchain. Governments worldwide are well aware that blockchain technology in some form can bring economic benefits and the effect can already be seen in various initiatives such as Republic of Georgia's 'Secure Land Titles', Republic of Estonia e-voting, Russia warming up for identification use case, etc," he adds.

According to a report by the Financial Industry Regulatory Authority, blockchain technology has attracted significant interest and funding in the financial services industry in recent years. More than $1.4 billion has been invested in this technology to explore and implement uses in the financial services industry.

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