WIN Magazine - Summer 2017 - 39
development is currently where the internet was back in 1993 or 1994: It was impossible to predict its eventual reach. We're
still trying to figure that out now. Email and
browsers were exciting developments back
in 1994, just as eliminating reconciliation
costs is an exciting process today.
New technologies follow a predictable
path toward mass adoption. Trial and
error defines the earliest stages, case histories and success stories drive development after that and integrated platforms
emerge when applications are proven and
customers demand robust user interfaces.
Blockchain will follow this same path.
The current development focus is on
cost savings. Opportunities include smart
contracts, online payments, digital identity and clearing and settlement. In each
case, developers are looking for redundancies, duplication and inefficiencies
that can be automated through blockchain architecture. Solutions are being
tested and studied to measure ROI and
One of the best examples is in international shipping. Ports and container
ships transport an estimated 90 percent
of global trade. Each shipment involves
up to 30 different companies, each looking for a profit along the way. There are
enormous inefficiencies in the process.
In 2016, The Commonwealth Bank of
Australia and Wells Fargo tested a blockchain ledger to ship 88 bales of cotton
from Texas to China, dramatically reducing the number of companies involved. Of
course, this initial test case was heavily
monitored to provide a detailed proof of
concept, but the opportunity for cost savings is obvious. Ultimately, the test was
successful and will undoubtedly be refined
and improved for future shipments.
Other blockchain tests included
Barclays trading derivatives and banks
settling cross-border remittances.
Platforms like Ethereum are working
hard to enable these types of smart
contracts, and over time, transactions will include increased complexity and sophistication. Companies like
Slock.it and Backfeed are integrating the
internet of things (IoT) and decentralized
autonomous organizations (DAO) with
blockchain technology to support entire
business models without any central
Today's technological environment is full of these conflicting interests. Positive applications develop at
the same times as disruptive ones.
Companies that invest in the technology need to be aware of both sides.
Blockchain has enormous potential to
reduce costs for financial services companies, but it may eventually destroy
their business model as well. The trick
will be to adapt as the technology progresses and procure profitable services
along the way.
Patrick Schwerdtfeger is a
business futurist specializing
in technology trends including
blockchain and social
media, and was the keynote
speaker at the AAMGA's Annual Automation
Conference in March 2017. His primary
areas of concentration are in blockchain
protocol, artificial intelligence, disruptive
innovation and marketing strategy. Contact
him at firstname.lastname@example.org, or visit his
website at www.patrickschwerdtfeger.com.
Who can manage claims for domestic program underwriters,
insurance carriers and London markets? Engle Martin can.
Personal Service. National Reach.
That's the Engle Martin Way.
Whether you need a third-party administrator
for programs written domestically or via London
markets, Engle Martin provides the expertise and
infrastructure to effectively serve as a standalone
claims solution or to complement existing
operations. Trained to be the best at what they
do, our claims professionals are setting new
standards for the property and casualty industry
one claim at a time.
Visit us at www.englemartin.com
to learn more.
AAMGA.ORG | S U M M E R 2017