Automotive Industry will Benefit Greatly from Utilizing Blockchain Tech
Blockchain technology has found applications in many industries, even the most unexpected. A recent study revealed that blockchain is going to become a disruptive force in the automotive sector. A major breakthrough is expected to happen within the next three years.
“The global data clearly revealed finance, supply chain and mobility services as top areas where blockchain could reduce frictions,” the report says.
Even though the automotive sector is still at the beginning of its fintech development, there is a large possibility of blockchain to facilitate the general productivity of the area. According to the research conducted by IBM Institute for Business Value in collaboration with Oxford Economics, blockchain has the capability to improve collaboration and enhance trust between businesses, consumers, and vehicles.
The study is based on the answers of 1,314 automotive executives from 10 countries and 10 different functional fields. It shows that 62% of participants consider blockchain a disruptive force that will make a breakthrough in the automotive industry within three years. Furthermore, 54% of surveyed revealed, they expect new business models to come and increase the level of investments in blockchain.
As per the study, 54% of companies, that have already adopted the technology, are planning to grow a large commercial blockchain network within the next three years. Blockchain technology is beneficial in overcoming challenges of storing, processing, sharing, and analyzing information. With data accessible to every participant, blockchain creates a lifetime history of an asset, for example, a vehicle, or transaction.
“Fifty-five per cent of OEMs and 47 per cent of suppliers say implementing blockchain will improve imperfect information in their business networks,” the research paper states.
Moreover, the research adds, 52% of original equipment manufacturers (OEMs) and 40% of suppliers consider blockchain a good platform for ensuring information security. It is also mentioned that 43% of OEMs and 29% of suppliers think blockchain can improve the ability to access information needed for a certain transaction.
However, only a small number of executives say that their companies are ready to embrace blockchain technology, explaining they don’t have a general understanding of the system and can’t develop own strategy.