Using Blockchain to Revolutionize Capital Markets and Supply Chains
Sophie Gilder, Head of Experimentation at Commonwealth Bank, looks at the global impact of recent blockchain technology developments.
Blockchain creates trust and transparency regarding data and can be used in an array of compelling applications. BCG experts help organizations identify—and seize—the potential.
Zia Yusuf
Blockchain is a potent and versatile emerging technology that is only starting to live up to its billing. Best known for its use in cryptocurrency, blockchain—a distributed database that fosters trust and lowers transaction costs—has the potential to change how organizations operate. Already, the technology is used in a variety of business- and public-sector applications, such as tracking and tracing items in supply chains, automating customs clearances, and facilitating financial transactions. And many more applications await development.
The challenge for organizations is threefold: understanding the technology, determining how blockchain can be molded to create value, and developing an approach that captures value early on, in order to fund the journey.
By removing intermediaries, automating processes, and creating trust and transparency when it comes to shared data, blockchain unlocks value. Capturing that value requires business model innovation, operational efficiency, risk management, and social impact. The possibilities are boundless—but before organizations can seize them, they need to answer some key questions:
These are not easy questions, especially when the technology itself is complex—and unfamiliar ground for many leaders in business and the public sector. BCG not only helps organizations answer these questions but supports them through the full journey. We do so by distilling that journey into a unique and proven four-step process:
Tracr. The diamond industry’s value chain is highly complex, with many players and processing steps but little transparency. We worked with De Beers Group to develop a blockchain-based solution—called Tracr—that attaches a digital fingerprint to every diamond and records that identifier on the blockchain, from mine to point of sale. Other diamond producers and retailers have joined the effort, with the goal of implementing Tracr as an industrywide standard.
United Nations World Food Programme (WFP). BCG worked with WFP to build a blockchain-based platform, known as Building Blocks, that transformed the way the agency provides vital cash transfers to refugees. The platform allows WFP to authenticate a beneficiary’s identity rapidly and to record the transaction in-house, rather than relying on third parties. It stores all payment details in a transparent, tamper-proof, and easy-to-audit fashion, and—by eliminating intermediaries—it has reduced transaction fees by 98%. Since its launch in 2017, Building Blocks has improved the handling of millions of cash transfers, ensuring that needy populations have food security.
Sophie Gilder, Head of Experimentation at Commonwealth Bank, looks at the global impact of recent blockchain technology developments.
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