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Regardless of whether you are buying property or you just got employed, contracts are extremely important documents. Up until now, industries all around the world used traditional contracts for all purposes. However, these contracts come with a lot of problems such as depending on third parties for validation and administrative charges to name a few. As the world is becoming digital, it is also important for contracts/agreements to follow through with the latest trends.
Smart contracts are the future of agreements as they come with a variety of advantages. Also, smart contracts give individuals more control over their online identities, such as digital, data, and reputation assets. As a result of this, individuals can give access to only limited amounts of personal data. At the same time, enterprises can learn about their customers seamlessly.
Let’s take a look at five use cases of smart contracts in industries:
At present, if you need to claim auto insurance, you will have to yield various data sources, reports, and fill data in a myriad of forms. The problem with this is that it creases the chances of errors, while wasting resources at the same time. The insurance companies have to waste valuable time verifying policies, reports, and records. Also, there are high chances of delays and increase in costs due to the lengthy processes.
However, smart contracts are the best solution for the auto insurance industry. Smart contracts can record valuable data, such as driver reports, driving record, and policies. Verification, processing, and payment will happen automatically with the new contracts. On top of that, it eliminates the need for duplicating reports, which will save resources for the auto insurance industry.
Clinical trials face a lot of obstacles because there is a lot of friction when it comes to data sharing between organizations. Also, organizations don’t have a complete understanding of the various advantages and disadvantages of different types of new treatments. Involving patients face roadblocks as there isn’t a proper system that takes consent from them consistently.
Smart contracts are ready to solve all these problems because it approaches them from a different angle. It decreases costs and improves visibility by making the setup processes efficient. It allows different institutions in the blockchain to access the data available on the network. However, it addresses privacy issues as organizations can access only specific types of data. At the same time, it automates the process of acquiring and tracking consent of patients, for better data sharing.
Data recording (Finance industry)
The current accounting systems which are in place, are vulnerable to errors and fraud as entities have direct control over them. Also, as every organization has to maintain their infrastructure, it requires a large number of resources. Also, there is also the need for middle software and human capital to validate transactions when there is no interoperability between different systems.
With smart contracts, the whole concept of data recording in the finance industry changes considerably. Smart contracts ensure that financial data used by different organizations remain uniform throughout, which reduces the cost of auditing and improves financial reporting. Cost of accounting will also come down, as all organizations in the blockchain will share the expenditure.
Every step of supply chain management will improve significantly with smart contracts. At present visibility is decreased significantly in supply chains because of information sharing with parties that are relevant and isolated capturing of data. Also, the formatting of data is necessary when organizations want to get values from it. There are a lot of blind spots and incompatibilities when it comes to data and tracking goods.
Inventory tracking will improve considerably with the introduction of smart contracts as it can take place on a granular level. As a result of this, supply chain risk, insurance, and financing will see a huge boost. It will also decrease theft and fraud in the supply chain because of the improvement in verification and tracking.
The current systems in trade finance require the issue of letter of credit. The process of getting this important document requires a lot of paperwork and coordination. Similarly, there will be delays in shipment of receipts as the documents are physical. As the process is de-linked, duplicate financing and document fraud are two major problems in this industry.
With smart contracts, the process of paying and obtaining letter of contract gets automated. There is higher efficiency when it comes to validating, customizing, and creating transport, title, and trade-related contracts. Due to the decrease in fraud and ease in transferring resources, financial assets liquidity will improve.
These are the five use cases of smart contracts in industries. If industries want to continue evolving and improving their services, smart contracts are the solution!
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