Blockchain’s future outside financial services

In recent years, blockchain technology has served as a key disrupter in established and trusted broker industries – most notably financial services, one of the largest and most lucrative sectors in the world.

Despite contributing $13 trillion to the global economy, the financial services industry remains heavily reliant on inefficient manual processes. Every day, trillions of dollars are moved around by financial services organisations as millions of businesses and individuals interact with one another. Though dressed in a digital façade, the industry continues to be pervaded by process delays, complex infrastructure, and rising expenses.

>See also: Blockchain: Helping secure digital identities

In an attempt to address these ever-growing issues, leading financial services companies have invested heavily into blockchain – which rose to public attention as the technology underpinning cryptocurrencies such as Bitcoin.

In fact, according to PwC, 56% of financial executives are aware of the importance of blockchain, and a further 20% identified it as the most important technology to invest in over the next year.

This rapid uptake in investment in blockchain, which to date has primarily centred around finance-focused blockchain start-ups, has lured many into the belief that the technology’s only real-world applications lie within finance.

However, finance isn’t the only broker industry that stands to benefit from blockchain technology. Real estate, insurance, art and antiquities, and recruitment all work on the same intrinsic model, whereby two parties who want to exchange value are reliant on a third-party broker to enable transactions to take place. Blockchain has the potential to drive efficiency and simplicity in all of these industries.

Blockchain is a vast, globally distributed ledger that is able to record anything of value and can be accessed on millions of devices. Money, bonds, titles, contracts, CVs and virtually any other form of asset can be transferred and stored privately and securely because trust is established through network consensus and cryptography.

>See also: Dispelling the top 10 blockchain myths 

Broker industries stand to benefit from this technology in a variety of ways. Blockchain platforms are likely to be far cheaper than existing systems and will streamline infrastructures because they remove an entire layer of overhead in systems and process dedicated to managing trust and confirming authenticity.

In a distributed ledger, authorisation is effectively performed by everyone on the network, simultaneously. This process, coined ‘consensus’, reduces the need for intermediaries. In an era of cyber-crime and increasingly stringent regulatory requirements, systems which are highly fraud resistant, such as blockchain, could have a revolutionary impact on a number of service industries.

Recruitment in particular is one market that could be significantly improved by utilising blockchain. Globally, the recruitment sector is worth £320 billion with the UK industry being worth around £35 billion.

Further, the global verification sector market was valued at $8.7 billion in 2016, and this is forecast to reach $9.7 billion by 2021. However, like the finance industry, the recruitment sector remains riddled with inefficiencies including long and costly on-boarding and verification processes stemming from a lack of trust between candidates and employers. Verification and Recruitment platforms who look to harness blockchain in the industry, such as APPII or Technojobs, will be able to remove these issues and drive value upwards.

>See also: Blockchain technology: from hype to reality 

As the gig-economy continues to grow, employers are seeing larger numbers of candidates with short-term contracts and freelance work on their CVs as opposed to long term roles with a single company. As such, candidates’ CVs are being increasingly varied, with multiple roles listed in short periods of time. These CVs often take significant amounts of time for candidates to curate and verify on part of the employer.

Harnessing blockchain will enable recruiters to offer in-house HR teams verified career profiles for the first time. Stored securely on a blockchain system, every role or qualification added to the profile by candidates will be independently verified by the organisation it pertains to, reducing the substantial amount of time and money spent ensuring candidates are who they say they are.

These dynamic verified CVs, or ‘Intelligent profiles’ are easy to update and already verified by previous employers and educational institutions, making it easier for candidates to apply for their dream roles without potential employers questioning the validity of their prior experience or qualifications.

For in-house recruiters, blockchain verified CVs will make it significantly easier to find the best candidates for a role, and at a significantly lower cost. Intelligent profiles will also increase productivity for both in-house and agency recruiters as candidates will already be verified.

>See also: The business of Blockchain in financial services

The potential of blockchain is growing exponentially, especially in industries other than finance. With the World Economic Forum predicting that by 2025, 10% of GDP will be stored on blockchains or blockchain-related technology, it’s clear that it’s potential to drive efficiency and increase value is yet to be completely realised.

While media attention continues to focus on cryptocurrency and blockchain’s applications within finance, it’s important to recognise that the technology can be applied to almost every single industry.

 

Sourced by Gary McKay, managing director and founder at APPII

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.