Blockchain

As the old saying goes: “Money makes the world go round”. The modern economy is dictated by the influx and fluctuation of money into domestic markets. Any disruption coming from movements within hedge funds, capital markets and local trading; sends ripples across the global financial market. History tells us that the succession of technology utilized in banking and finance has an adverse effect on investor sentiments, market outlooks and the market movement. The perfect example of how tech instilled market fears was based on a computer bug, known as Y2K bug where years before the turn of the century, there were fears allayed by bankers, traders and consumers about how the supposed Y2K bug will render banking, commercial and financial services inoperable, thus bringing about a global financial meltdown.

Bacolod City, Negros Occidental May 24, 2018 – The Philippines have enjoyed tremendous economic rewards from its status as a global destination for Business Process Outsourcing (BPO) and Shared Services for more than two decades. With the emergence of technologies such as Artificial Intelligence (AI), Blockchain and Robotic Process Automation (RPA), traditional and entry level jobs are rapidly being replaced by hybrid technologies such as automated chat bots. For the Philippine BPO and Shared Services industries that employ over a million people in the country, the automation effect poses as a risk to its human capital and ultimately, the future of the industry of itself.

The magnitude of Blockchain’s disruption is felt across industries as its potential and actual use case has increasingly become a hot topic, even for non-Blockchain conventions like the annual RSA Conference where its identity is about security and intelligence technologies. In the recent RSA 2018 Conference held in San Francisco, Blockchain and distributed ledger technology (DLT) were among the premiere topics across enterprise security.

The growth of Blockchain use cases points to the technology’s rapid adoption rate where early pioneers have gained verifiable merit of its overall benefits to the business. As the awareness of the term Blockchain spreads, its association to Bitcoin and cryptocurrencies are expected to spread. Blockchain can fully function as a distributed application system without  cryptocurrency. However, cryptocurrencies cannot exist without a Blockchain platform to support its operation.

One of Blockchain’s key selling points is its interoperability: it is able to fully service data and encrypted information coming from parallel organizations or coming from other Blockchain-enabled systems. As the Blockchain movement is piloted by the many use cases, how real is the possibility of Blockchain disavowing interoperability by being a self-contained silo that limits processing of information within its native ecosystem?

When an organization has decided that a Blockchain system will be beneficial to the business by means of a comprehensive study involving cost-benefit scenarios and a much improved business delivery rate as an ideal concept, the only part left is to build the actual Blockchain and it is no easy feat considering Blockchain’s architecture.

A revolution presents a shift from the existing way of doing things towards a new way of facilitating existing processes that usually involve a leap in technology employed. The shift from manual labor to the use of coal or steam engines to aid production was instrumental in the first industrial revolution early in the 19th century. Fast forward, 21st century society is due for a leap in technology with the advent of Artificial Intelligence (AI), Blockchain and the Internet of Things (IoT).

The convergence of platforms such as Blockchain and the Internet of Things presents a foreseeable future where transactions become autonomous and declutter manual processes such as billing and cashier lines, thereby making them a thing of the past.

Blockchain’s impact on the Insurance industry is at a stage where the possibilities of drastic reduction of inefficiencies and improve the expense ratios are budding at the doorstep. While at this stage, Blockchain can be seen as a massive overhaul of the insurance industry, but basing on the early use cases of consortiums, the impact of Blockchain will be heavily felt on the support side of the insurance industry.

The decision to introduce Blockchain into the core of the enterprise operations is based on a scholarly, methodological and scientific research contingency. This encompasses the firm decision making of knowing Blockchain’s core technology, its enterprise benefits and its transformative effect as a foundational technology for the business.

Technology is dictated by its cycle of succession of platforms where one piece of technology succeeds an ageing technology. The predecessor technology has outlived its heyday as the enterprise must discard it in favor of a successor.

Aside from Blockchain, other disruptive technologies such as the internet of things and analytics are poised to have a substantial impact in the insurance technology.

Despite the transfer of technology, the insurance industry process of enrollment, claims, reinsurance and maturity have practically relied heavily on paperwork and tedious processes that require collaboration across institutions.

While Blockchain has its traceable origins with Bitcoin, Blockchain has evolved into a payment solutions platform that can help humanitarian funding remittances.

The disruptive nature of Blockchain is going beyond business and is at the forefront of reshaping humanitarian efforts by providing an essential platform to manage identities, streamline the traceable distribution of aid and enabling direct patronage to person transactions.

Blockchain and its embedded digital identities goes beyond registration and storage. It is meant to be the key to managing a person’s digital identity that remains fragmented and is at risk for every platform that it is used to register and therefore create another new set of identity as extension.

Insurance fraud is as old as Insurance itself. In this day and age, insurance fraud is costing the industry millions annually, not because of the swindling but in terms of the resources spent in discovering and stopping fraud at its early incursions.

Currently, when conditions are dire, and time is of the essence, both communications and distribution channels experience disruption. This is costly and significantly hampers the coordination of various working groups that are responding to the situation. Factors such as conflict, hostility, weather, geography and shortages are variables that hamper response groups. When communications breakdown, distribution channels, in the form of logistics, disbursement and displacement of aid are also affected. At times, miscommunications in critical situations are costly mistakes that have major setbacks to the relief efforts.

When it comes to identifiable personal information, technology is pointing to Digital Identities as the future defining platform of the management and issuance of personal information.

The recent study from the European Union blockchain initiative highlighted the importance of Digital Identities within the Blockchain framework and is recognized as a principle identification system in the new world of digital economics.

Blockchain has been a transformative platform in the world of insurance as its premise of security, optimal processes and automating otherwise cumbersome knowledge based processes have been proven to be the next phase of the industry’s continued modernization under technology. While large consortia have developed and leveraged Blockchain through use cases, the focus of Blockchain has further intensified in the diversity of the insurance market that includes medium and smaller insurance companies.

Digital Identities present a modern and effective use case of Blockchain’s decentralized capability to record participant information with strict rules of security to limit access while having the feature to update the records as new information are attained.

The movers in Blockchain in the insurance industry are the titans that are operating in a global scale. While the responders and early adopters also comprise of the subsidiaries and partners of these insurance giants that are the first to experience Blockchain’s transformative effect. In the track record of technology, it is the small and medium scale organizations that are often in the ‘wait and see’ stage apprehension when it comes to technology. Adopting new technology has its fair share of risks and costs. This is why some smaller players are still waiting for technology platforms to mature before they make a significant step in adopting to these platforms.