From insurance, manufacturing, and real-estate to international remittances, legacy businesses often suffer from high- cost transactions. Either middlemen or archaic practices are the reason behind high-costs of any value exchange.
However, a blockchain-based smart contract solution can potentially enable these businesses to remove intermediaries from the transactions and automate conventional, manual processes.
Additionally, blockchain technology platforms like these can facilitate it to meet requisite regulatory and compliance regulations. Together, it can provide business with solutions to achieve significant growth and productivity, improve customer experience, and reduce operational complexity.
Smart Contract, and its Applications
A smart contract is a contract, or a set of business conditions, coded into computer algorithms. A blockchain developer writes the contract terms or conditions into a series of ‘if and then’ code functions. Once the stakeholders of a contract meet the pre-defined business conditions, the smart contract initiates the further steps to execute the transaction. A smart contract, essentially, fulfills the need for a solution to execute fast and efficient business transactions.
With smart contract integration into existing processes involving intermediaries and repetitive tasks, businesses can optimize their services and create new revenue models. For instance, the insurance industry can use smart contracts to automate various policy agreements. A smart contract for travel insurance can automatically trigger payments upon the cancellation of a flight. It can execute a payment directly to the policyholder after the confirmed cancellation, and thereby, bypass the claim process. In the manufacturing sector, it can replace several complex processes like bills of lading, quality control, or the proof of origin.
Key industry players believe that smart contract applications can enable real value savings for businesses.
Benefits of Smart Contracts
A smart contract enables differents business processes to run automatically. Then, businesses do not need to rely on any supervision for the fulfillment of a contract. Mathematical algorithms make it happen. As a result, smart contract-enabled processes become:
- Automatic execution of tasks defined in a contract
- Quick transactions happening within seconds
- Direct interactions involving no intermediaries
- Cheap contract execution with almost no charge
- Transparent sharing and access to information enabled with blockchain
Smart Contract Applications in Businesses
The numbers of smart contract applications and use cases are increasing every day. Here are some interesting business areas where smart contract solutions are transforming the processes of industries like banking, insurance, real estate, supply chain, life science and health care, and more.