Twitter Facebook LinkedIn Flipboard 0 Blockchain. Bitcoin. Cryptocurrency. It’s likely you’ve heard these terms mentioned in the news recently, but unless you work in banking, these terms probably don’t factor much into your day-to-day work. Let’s face it – customer experience doesn’t often overlap with the world of financial technology. But blockchain is a technology that holds the potential to revolutionize the way we all do business, far beyond its potential to change financial transactions. Enterprises everywhere seem to think so too: * 90% of North American and European banks are exploring blockchain technology [Source] * Nasdaq is piloting a blockchain-powered private market exchange [Source] * IBM and Comcast Ventures are backing a fund for blockchain startups [Source] * Kodak share prices leapt 117% after announcing a new blockchain initiative [Source] * Gartner predicts the total business value-add of blockchain to reach $3.1 trillion by 2030 [Source] If your business has anything to do with customers, the processes it follows to sell to them, market to them or share information with them could be radically transformed by blockchain. That might sound intimidating. But blockchain has enormous potential to change customer experience for the better – improving access for disadvantaged customers, making businesses more accountable, and increasing security in all kinds of business-customer interactions. In this article, I’ll walk you through some examples of how blockchain could change the customer experience, and the firms that are pioneering those changes. But first, you’ll need to know a little about how blockchain works – not an easy feat for something so technical. I spoke to Andy Spence, Workforce Advisor and faculty member of Blockchain Research Institute, who gave me a crash course on what blockchain is about and how it’s being used. Andy says there are two main things to consider when learning about blockchain. Firstly – blockchain and bitcoin (or cryptocurrency) are completely different concepts. Although bitcoin is built on blockchain technology, bitcoin represents just one example of how blockchain technology can be applied. Blockchain technology itself can be applied in many different ways, far beyond just cryptocurrency. Secondly, blockchain isn’t just used in financial settings. There are a lot of examples of blockchain technology being used in a wealth of industries for different applications. For example, blockchain technology is already being used for charity donations, voting systems, HR processes and more – far outside of the scope of finance. And there’s a lot of potential CX uses for blockchain too, which I’ll explain in a moment. So how exactly does Blockchain work? I’ll explain (although if my explanation is too simplistic for you, I recommend this excellent primer from Blockgeeks). Imagine you have to send some money to a friend. To do this, you contact your bank and ask them to send the money to your friend’s account. The bank has a ledger of transactions. To perform the transfer, it removes the funds from your account, adds them to your friend’s account, and records it all on their central ledger. The process is reliant on a single authority – the bank – to perform the transaction and keep accurate records on their ledger. As a consumer, you have to trust that the bank will do this accurately and without corruption. Sadly, this isn’t always something that banks are capable of doing. Blockchain allows for transactions to occur without a single authority to oversee them. It does this by recording transactions on an electronic ‘ledger’ that everyone can access. Computers all over the world hold copies of this ledger and continuously work to verify transactions registered on it. Transactions made on the blockchain are stored forever, and it’s impossible to tamper with them or alter them once they’re made. Sensitive information relating to each transaction can be cryptographically secured, meaning that it is only accessible by those with the right keys to unlock it. That information can be disclosed at will by the parties involved in the transaction. At the moment, blockchain is being used most notably by Bitcoin to provide decentralized payments – that is, payments that don’t need to occur through a bank. And while the example above uses banking as an example of a transaction, blockchain technology could be used for all sorts of information that moves from one person to another, not just financial transactions. In short – Blockchain democratizes and secures transactions, taking transactional ledgers from the hands of authorities and putting them into the hands of everyone. Businesses of every kind hold ledgers which record the moving of things from one place to another, whether it’s money, products or services that are changing hands. For example, CRMs exist to record details of customers’ identities and their ownership of products and services. Now imagine if all the transactional information your company holds wasn’t located inside of your business – imagine it existed in an external, decentralized way, on the blockchain. Suddenly, there’s a whole lot of extra possibilities for customers, and enormous implications for businesses. Here are some conventional processes that customer service functions perform now, and how blockchain could transform them in the future. Sending and Receiving Payments Bitcoin and other cryptocurrencies use the blockchain to send money from one person to another. It’s a secure yet transparent system that operates with no need for a central bank, allowing strangers to transact without needing a third party to oversee the transaction. Our modern banking systems are not perfect. Clearing and identity checking takes time. International payments can take a long time and usually come with high fees. Customers who are disadvantaged or disabled may not have a bank account or be able to get to a bank. Payments made through blockchain technology could cut out these banking-related issues, letting money move freely between businesses and their customers, with no banks or payment processors needing to act as a middleman. It could cut payment processing times to minutes (in some cases, from days or weeks), and completely revolutionize processes such as clearing. In fact, change is already underway – Mastercard is even opening up its own blockchain as an alternative payment method. Sending or Receiving Products The Internet of Things (IoT) is getting bigger, and this technology combined with blockchain could allow for massive improvements in how customers pay for and receive products. Customers commonly complain when they have paid for a product or service that they haven’t received. Those complaining customers are the tip of the iceberg of problems with the dispatchment and receipt of products – for every customer who complains, 26 remain silent. Those 26 customers are opportunities lost for businesses. Rather than highlighting service problems and giving companies a chance to improve on them, those customers just walk away. IBM’s Watson IoT blockchain offerings allow for goods to be tracked along each point of a supply chain, with information about the status of a package updating via GPS as it moves, and payments being released when each section of a transaction is verified as having been completed smoothly. Holding this information in the blockchain means that neither party needs to prove the delivery status of a package if it goes astray – the transaction’s status is an objective truth held within the blockchain. As well as allowing companies to act proactively upon service issues, this means that businesses can gain increased visibility into their supply chain since they would no longer need to rely on customer feedback as an indicator that a process hasn’t worked correctly. This new insight into service failures could open up the potential for service improvement of a kind never seen before. In the future, businesses could even have the capability to take customer funds only when a product has been verified on the blockchain as received by the customer. This type of blockchain-facilitated process change could be used by companies as a strategic differentiator, helping to reassure customers that they won’t be at risk of losing out if a package goes astray. Smart Contracts In the same way that IoT and blockchain could revolutionize the transaction of physical goods, there’s potential for non-physical exchanges to be changed too. One way this can be done is through smart contracts, facilitated through the blockchain. Using the blockchain, contractual obligations can be tied to specific actions through an “If/Then” model. These actions are triggered when contractual conditions are verified through the blockchain as having been met or not met. For example, imagine that a customer signs a contract with a cable firm. The cable firm agrees to have service available by a specific date. The transaction is held in a smart contract and recorded on the blockchain. If service is not delivered by the specified date, the customer gets a refund. Or, if service is set up on or before the specified date, payment is taken from the customer, and the service begins. Because the transaction is verified publicly and cannot be altered or tampered with, all parties are held to their contractual obligations and action can automatically be taken if they are not met. Real distress can be caused to customers when companies don’t keep to their side of a bargain. The burden of proof often rests on the customer to chase, discuss, persuade and fight for compensation. When things go seriously wrong, cases often get referred to third parties such as complaints teams (or even consumer affairs regulators) who are needed to verify claims of contractual wrongdoing and put situations right – a layer of operations that’s often resource-heavy and complicated to administer. But with smart contracts automating the consequences of contractual non-compliance, third parties and complex processes become unnecessary. The time and effort required to put situations right can be reduced, while leveling the power imbalance between customers and businesses. It also helps companies with great processes gain a competitive advantage, especially when compared to companies who seem to only stay in business by making it prohibitively difficult for their customers to complain. You might have heard about smart contracts having the ability to revolutionize our voting systems, which is exciting in itself. But in the world of everyday business, smart contracts are already being used by Barclays Corporate Bank to verify ownership and release funds between banks, and there’s vast potential for contracts of all kinds to switch to a smart model too. Customer Record Keeping We’ve all heard horror stories of companies who have failed to keep customer data safe. Whether it’s personally identifiable information, passwords, sensitive health records or even information that reveals political preferences, businesses and customers everywhere are rightfully concerned about the security of customer data. As it stands, customers have to trust that companies only hold information about them that’s reasonable and proportionate when in reality, that might not always be the case. Not to mention that each time customers hand over their personal information to businesses, it puts them at risk of identity theft. Companies are working on systems to store customer identity information on the blockchain, with that data secured in an encrypted form that customers can disclose as they choose. Ultimately, this could mean that in the future businesses wouldn’t need to hold the personal information necessary for customers to pass data security checks. Companies wouldn’t have to worry about keeping that data safe, clean or compliant as it won’t be held internally, and customers won’t have to worry about excessive or unsafe personal information being held by companies. Compliance processes are also an area ripe for massive disruption by blockchain – as the backbone of compliance rests in rigorous record keeping. With a recent Accenture report showing that 23% of financial services firms spend as much as 5% of their annual net income on compliance every year, there’s the potential for substantial cost savings through moving internal records to the blockchain. Here’s an excellent article that explains more on this, if you’re interested. The Future of Blockchain? “We should think about the blockchain as another class of thing like the Internet… But the blockchain concept is even more; it is a new organizing paradigm for the discovery, valuation, and transfer of all quanta (discrete units) of anything, and potentially for the coordination of all human activity at a much larger scale than has been possible before.” – Blockchain, Blueprint for a New Economy – Melanie Swan Blockchain technology is a fantastic concept to explore for anyone who loves ethical business, who loves exploring new ways of working, or who wants to make business better for customers. This new technology gives us all the opportunity to reconsider traditional business processes from their foundations. It’s not far-fetched to consider that in the future, companies like yours and mine could employ blockchain specialists not just to remove liability from businesses, but to make all kinds of processes fairer for customers too. The Cambridge Analytica scandal has caused customers everywhere to question who holds their data, and why. We’re all living in a new age of data insecurity and mistrust. Blockchain technology could act as the antidote to this consumer skepticism, as the decentralization of customer data could usher in radically open, more transparent customer relationships – which could even be the next big differentiator for businesses. Blockchain adoption could allow our businesses to demonstrate this increased transparency and enable us to build a new type of relationship with our customer – one built upon core values of security, fairness, and equality. Blockchain could even usher in an entirely new era of customer expectation: the expectation that customers should be treated fairly by the businesses they spend their money with, and what’s more, that the blockchain itself can act as a guarantee for that fair treatment. That’s why customer experience professionals everywhere need to be aware of the potential of this new technology. Of course, nobody knows to what extent blockchain will be adopted. But with publications like Forbes and Fortune predicting blockchain will, quite literally, change the world – along with blockchain ventures launching from some of the world’s most prominent and influential businesses – we all need to watch how this technology develops. Original post is here. Twitter Tweet Facebook Share Email This article was written for Business 2 Community by Kane Pepi.Learn how to publish your content on B2C Author: Kane Pepi <p>Kane Pepi is an experienced financial and cryptocurrency writer with over 2,000+ published articles, guides, and market insights in the public domain. Expert niche subjects include asset valuation and analysis, portfolio management, and the prevention of financial crime. Kane is particularly skilled in explaining complex financial topics in a user-friendlyView full profile ›More by this author:VoIP Basics: Everything Beginners Should Know!Bitcoin Investment, Trading & Mining: The Ultimate Guide for BeginnersIs This a Better Way to Set Your 2020 Goals and Resolutions?