There have been many technological advancements in recent years that have significantly disrupted traditionally rock-solid industries. They have changed the way these industries operate, becoming more efficient and effective than ever before, often cutting out the middleman. Perhaps the most important disruptor to have come around in recent years is that of blockchain technology. You will no doubt have heard all about the many benefits that it can offer to individuals, businesses, and governments.

While the idea sounds great, most companies don’t know where to begin when it comes to implementing blockchain technology into their existing business. The main decision-makers understand that if implemented correctly, blockchain technology could help them save a lot of money, time and energy, but they simply do not know how to begin.

Example of blockchain disruption in a traditional industry.

One of the more clear-cut examples of the use of blockchain technology in traditional industries is that of the banking industry. Banking is a vital part of everyone’s lives and shared resources are everywhere in this sector.

Using ATM machines as an example, every one of these machines is owned by a bank, but they cater to cards from a massive network. In order to achieve this level of sharing, there needs to be a complex apparatus used, which usually is provided by VISA. This is the middleman or, the centralized group, that is the owner of the database and the processing layer for the transactions that allows ATM machines to operate efficiently.

If you created a modern day ATM machine using blockchain technology, the middlemen such as VISA can be eliminated completely from the process. The blockchain database technology could do all of the complex and intensive work by aligning the interests and processes of the concerned banks.

There could be a singular worldwide blockchain network that can manage bank card interoperability.

While a 1% ATM withdrawal charge might not seem very significant, in the grand scheme of things, it is huge. With millions of ATM withdrawals occurring across the world every day, this certainly adds up over time.

Even these small charges can be enough to cause serious issues in the world economy. With a blockchain-based system, this would put more money into the hands of the consumer, which will help drive economic growth and also make the bank’s customers happier.

Another example of how middlemen can be disrupted.

There is massive potential for the use of blockchain in cutting out the middlemen in the insurance industry. People have been increasingly frustrated as their insurance rates have risen in recent years for no apparent reason. Subrogation can be made a lot more efficient with the use of blockchain technology as smart contracts can be used to gather the member’s payments, which means that a lot of the manual processes are no longer needed and the efficiency of pay-outs and the claims processing accounting aspects will be made a lot more efficient and effective. Traditionally, the exchange of money between the insurers when settling a claim has been manual and time-consuming. There are other aspects of the insurance industry that can be improved, such as the proof of insurance verification process, parametric insurance and providing first notice for any data sharing loss. There are a number of companies working to bring these tools to market and potentially change the insurance industry forever. Ultimately, it will be a beneficial move for the insurance companies, due to lower operational costs and for the insuree because the savings will most likely be passed onto them in terms of their premium and the pay-out process will be a lot smoother.

Why is there a need to cut out the middleman?

For all types of business, a centralized data authority adds extra cost, labor and time to various processes. Efficiency across the board can be improved significantly by getting rid of these middlemen.

The likes of Airbnb and Uber are examples of peer-to-peer disruptors that have entered the everyday lives of people in recent years and have been successful as they eliminate many of the layers which were formerly in between the vendor and the consumer.

This has led to better efficiency and speed, in addition to the end users saving costs. However, these disruptors still rely on middlemen, whether it is through their processing systems or their centralized data collection.

This adds levels of additional fees and required controls. The implementation of blockchain technology can help deal with these issues.

There are applications for blockchain technology in almost every sector. It can make available large quantities of data instantly and in a safe manner, at the same time as lowering expenses as a result of the reduction of operational risk and having the information transmission system simplified.

All of these layers are vital to businesses, but they currently involve central authorities who all take their own cut in the form of fees and charges – all of which adds up significantly over time.

It’s not just the industries of finance and insurance that stand to benefit. Any places where blockchain technology can be implemented can benefit from its effects.

In manufacturing industries, blockchain technology can aid a company through the production process by allowing for efficient supplier communication when it comes to everything from payments, receipts, and deliveries.

Those in the food and energy sectors can offer additional consumer protection and make the process more efficient for the intermediaries and producers. Raw material origination can be easily tracked and traced, ownership can be transferred digitally and members of the supply chain can communicate effectively with one another right throughout the process.

It is obvious that blockchain technology can offer a myriad of great benefits for businesses in most sectors. By cutting out the middlemen, you can significantly improve upon your bottom line – something that is a constant struggle for most businesses. There are only so many times you can increase the price of your product or service or cut production costs. You are not only saving money, you are also saving significant time and energy that could be better spent elsewhere in your business.

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