Senior executives are pouring substantial resources into blockchain technology to maintain a competitive edge.
In a recent survey conducted by Deloitte, private mid-market businesses are embracing blockchain technology as a means to revolutionize their operations and create new business models. The report found that executives are most bullish on storing and securing digital records, executing smart contracts, and exchanging digital assets, among other use cases.
Blockchain technology, once confined to the realm of financial services, is now being recognized for its potential to disrupt industries and increase trust by replacing middlemen with cryptography. This decentralized ledger technology offers mid-market businesses a plethora of opportunities to streamline financial transactions, automate contracts, improve supply chain tracking, and secure private data within controlled networks.
One of the key benefits of blockchain for mid-market businesses is the ability to execute faster, cheaper, and transparent financial transactions. By minimizing intermediaries and recording transactions on a decentralized ledger, settlements are accelerated, costs are reduced, and transparency is increased. This is particularly valuable for businesses engaging in cross-border payments or financial settlements between known parties, where speed and cost efficiency are crucial.
Another significant advantage is the implementation of smart contracts, which enable the automatic execution of contracts once preset conditions are met. This reduces delays and disputes, as seen in the example of insurance claims processing, where events like flight cancellations can be verified on the blockchain, leading to immediate payouts without manual intervention.
Privacy and control are essential for mid-market businesses, and blockchain provides a solution through private and consortium blockchains. These blockchains restrict access to authorized participants, ensuring data confidentiality and higher transaction speeds. This setup is ideal for internal record-keeping, audit trails, and inter-company settlements where regulatory compliance and privacy are vital.
Blockchain also offers the potential to significantly enhance supply chain transparency and traceability. By enabling comprehensive tracking of products through supply chains, businesses can improve recall management, quality control, and supplier accountability. This is crucial for maintaining customer trust and operational resilience.
Tokenization and asset management are another area where blockchain can unlock new financial opportunities for mid-sized businesses. By digitally representing physical or financial assets, businesses can increase liquidity and accessibility, opening avenues for innovation and new revenue streams.
In terms of governance and compliance, blockchain's immutability and transparency can help businesses meet regulatory requirements by providing auditable trails of transactions and records. This is especially valuable in regulated industries or where trust needs to be established with partners and authorities.
In summary, mid-market private businesses benefit from blockchain by automating processes, enhancing trust with transparent and immutable ledgers, securing sensitive data on permissioned blockchains, and unlocking new financial opportunities via tokenization. The practical implementation focuses on finance, contracts, supply chain management, and compliance functions tailored for their scale and privacy needs.
The survey also revealed that the boardrooms of the private mid-market firms that took part in the survey not only understand blockchain technology but also see the real value in implementing it within their day-to-day operations. The companies surveyed cited stronger collaboration between IT and business leaders when it comes to managing the IT agenda, indicating a growing awareness of the strategic importance of technology adoption.
As blockchain-based solutions raise the stakes for reputation and digital identities by adding a higher level of trustworthiness to digital interactions, mid-market businesses are poised to reap the benefits of this transformative technology. With a vast majority of companies surveyed planning to adopt breakthrough technologies such as blockchain, machine intelligence, and mixed reality, the future of mid-market businesses looks increasingly digital and efficient.
[1] Deloitte. (2022). Blockchain Technology and the Private Mid-Market. [online] Available at: https://www2.deloitte.com/us/en/pages/risk/articles/blockchain-technology-and-the-private-mid-market.html [2] Deloitte. (2022). Blockchain in Financial Services. [online] Available at: https://www2.deloitte.com/us/en/pages/consulting/articles/blockchain-in-financial-services.html [3] Deloitte. (2022). Blockchain for Supply Chain. [online] Available at: https://www2.deloitte.com/us/en/pages/consulting/articles/blockchain-for-supply-chain.html [5] Deloitte. (2022). Blockchain and Regulatory Compliance. [online] Available at: https://www2.deloitte.com/us/en/pages/risk/articles/blockchain-and-regulatory-compliance.html
Technology, once perceived as exclusive to the financial sector, is expanding its horizons, with mid-market businesses leveraging it, particularly blockchain, to revolutionize their operations and create novel business models. This cutting-edge technology, with its decentralized ledger, offers a wealth of opportunities for mid-market firms, streamlining financial transactions, automating contracts, enhancing supply chain tracking, and securing sensitive data within controlled networks, all while increasing trust and efficiency.
