Blockchain 2017: cost savings have started
In a few years, analysts are predicting multibillion-dollar savings by optimizing costs in a wide variety of industries when integrating business processes with blockchain platforms. The events taking place in the industry in 2017 confirmed these predictions — Cartaxi’s (a blockchain based platform) analysts share their observations.
Consulting companies and market experts give staggering figures about how one or another sector of the economy can save money if it actively uses blockchain technologies in its business processes. According to Accenture’s prediction, just 8 of the largest investment banks will be able to save up to $ 12 billion per year by 2025. Analysts at McKinsey believe that for the financial services sector, savings will be up to $ 110 billion. According to Capgemini, in the insurance sector, the modernization of the system will save 12.5% of expenses.
The first actual contract, based on blocking technology, concluded in the fall of 2016. The operation for a $ 100,000 letter of credit was made by Barclays Bank in 4 hours instead of the standard 10 days. On a production scale, such a time reduction in the operation is a big saving. Given that at the end of 2016, the market dealt with just a few transactions of this kind, analysts’ predictions look very optimistic. However, successful implementation of these operations gave incentive to actively test the platform by other companies. Among the most iconic system are Visa, IT giant IBM, People’s Bank of China, tourist giant TUI Group, Intel and others. “8% of the 3000 organizations surveyed in different countries of the world have switched to a pilot or implementation stage of blockchain. “25% are currently exploring implementation opportunities in the next 12 months” says Kyriakos Kokkinos, Executive Director, IBM Europe Partner, in 2017. Blockchain technologies are now starting to be used on the state level. Recently Estonia has created its own national crypto currency.
Transactions based on smart contracts are carried out not only in test mode, but are constantly being used. For example, trading operations based on Ethereum since July this yearare conducted by the Russian airline S7 in partnership with Alfa-Bank. The speed of payment transactions increased from 14 days to 23 seconds. Already, this saves the company a lot of money by reducing the workflow and labor costs for both partners.
Blocking technology saves money not only for business, but for the end customer. They are beginning to use advanced mobile applications. “The CarTaxi application directly connects car towing services and drivers caught in an unpleasant situation, anywhere in the world. The platform is based on a decentralized system, the dispatcher is not needed for the operation. The human factor is minimized and can be shown as a simple “client-supplier” chain. Due to this, the cost of the service is reduced, “Taras Semyonov, CEO of CarTaxi, comments.
The activity of companies in the field of blockchain had effect in the labor market this year. According to LinkedIn, the number of vacancies for specialists in blocchain has tripled since the previous year, and it grows by about 40% every quarter. Analysts expect that in the coming years in this sphere there will be personnel shortage, and salaries for employees will be several times higher than salaries in similar positions in other spheres.
“The decentralized database and smart contracts, in which the essence of blockchain technology lies, save billions of dollars in virtually every sector of the economy; any business, state or person — the system is universal. Savings occur as a result of reducing the number of intermediaries, bureaucratic procedures, human labor that is involved on running operations, and minimizing fraud. The technology is already being actively introduced by the largest corporations, therefore the predictions that analysts give about the useful results which blockchain will provide to the world, are fairly realistic, “as Taras Semyonov, CEO of the CarTaxi project, summarizes.