Blockchain is one of the latest crm technology enhancements in CRM. Since 2000, CRM systems have seen the infusion of many technologies and platforms. Some of these features have added several benefits to CRM solutions. We have seen browser-based cloud computing, social media, mobile apps, and big data & analytics to name a few.
What is Blockchain?
First, let’s discuss what blockchain is. Blockchain is defined in many circles as “a type of database that takes a number of records and puts them in a block (rather like collating them on to a single sheet of paper). Each block is then ‘chained’ to the next block, using a cryptographic signature. This allows the concatenated blocks to be used like a ledger, which can be shared and corroborated by anyone with the appropriate permissions. It’s an approach to data management that enables disparate organizations — none of which has absolute control of the data — to trace data through long processes involving multiple computer systems owned by different parties, whose goals and requirements can be vastly different. Blockchain provides a common denominator for just the data these disparate entities need to collaborate on, and a pedigree of the data that’s hard to fake.” In a time where just about every type of database in the public and private sector is being hacked, blockchain’s decentralized/distributed nature fosters a very secure and unhackable environment. The blockchain is most commonly used as a digital ledger for cryptocurrencies such as Bitcoin.
Here are some simple facts about blockchain:
- Digital assets (money, music, loyalty points) are distributed across a global ledger;
- Transactions posted globally across millions of computers;
- A block is created every 10 mins and linked to a time-stamped chain of blocks;
- Smart contracts are self-executing agreements between companies and people that use the blockchain;
- A blockchain removes intermediaries and their costs (an often-cited use case is that consumers can transfer money directly without the need for a bank);
- Transactions are mostly peer-to-peer because the intermediary is cut out of the process
- Blockchain technology will enable consumers to own and monetize their data;
- It can be permissioned (closed access) or permission-less (open to all).
According to 2016 research by Deloitte:
- A billion dollars in venture capital has flowed to more than 120 blockchain-related startups, with half that amount invested in the last 12 months.
- 30 of the world’s largest banks have joined a consortium to design and build blockchain solutions.
- Nasdaq is piloting a blockchain-powered private market exchange.
- Microsoft has launched cloud-based blockchain-as-a-service.
- Blockchain concepts, prototypes, and investments are emerging in every major industry.
Future of Blockchain and CRM
Due to the peer-to-peer nature of Blockchain, it is inherently customer-centric and will deliver genuine engagement for brands prepared to invest in long term customer experience and loyalty. CRM and blockchain are a perfect fit. Blockchain technology will be a safe place where to store certified information providing a high-end cloud and scalable industry-standard for certified data.
One of the most obvious CRM applications are CRM business verticals they may benefit from blockchain technology are healthcare, insurance, utilities/energy, government, supply chain, telco, publishing and real estate. These industries tend to have regulated processes performed by operators while interacting with customers. It means that the companies must follow specific steps and certify specific properties as described by country laws or trade unions. Yearly inspections are the norm and the companies must provide evidence that their employees had followed exactly the steps as described in some files or that the state of their systems evolved in a particular chronological order. Failure to do so implies fees, removal of products from the market and loss of partners. Saving the process data on the blockchain is key since it has military-level anti-tampering security.
Another possible CRM application would be B2C deployments. Blockchain creates distributed, encrypted ledgers that can operate without centralized management and serve as highly trusted repositories for transactions, digital rights and sensitive data, such as identities and property records. Transactions can self-execute via smart contracts that eliminate friction and transfer data and value without the participation of traditional intermediaries. CRM systems will be affected by new expectations around data privacy. Consumers have been required to share personal information and expose themselves to risk through hacks, such as the breach at Equifax and others, and are looking for a change. A blockchain can store and encrypt personal data and confirm details upon inquiry without actually sharing them.
Wide-scale Blockchain CRM may be years away but as the need for data security increases, specialized CRMs may be the first to incorporate it as market demand dictates.
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