Establishing Trust with Blockchain

Transcription

1 Establishing Trust with Blockchain Director of Business Development for AI Wendy Spies April 10, 2018

2 Technology always changes how we do business Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 Mechanization Mass Production Automation Connectivity

3 One thing hasn t changed across industries the foundation of trust needed to build an enduring, successful business Lending Bank Importer Land Registry Property Inspector Freight Insurer Appraiser Source materials Quality Inspection Adviser Bank Shipping Company Buyer Seller s Agent Retailer Exporter Issuing Bank Financing Real Estate Manufacture and assembly Consumer Inspection Company Industrial Supply Chain Trade Finance

4 Building trust is critical The truth is there is a high cost to a bad reputation. DARA KHOSROWSHAHI, UBER And losing it can have serious consequences: 2008 Peanut Corporation of America Salmonella Outbreak Our reputation is more important than the last hundred million dollars. 9 deaths, hundreds sick across 46 states 28 year prison sentence for the CEO One of the largest food recall in US history from Keebler crackers to airline packets. 25% decline across the peanut business RUPERT MURDOCH

5 Traditional methods of establishing trust across organizations are not only inefficient, they are risky Intermediaries increase cost and reduce direct contact with consumers Manual verification is time-consuming and error-prone

6 We need a better approach Reduce Cost Remove friction and allow direct interaction between parties Mitigate Risk Reduce security threats from fraud, hacking, and data manipulation Increase Speed Use a shared data source for transparency across organizations and increased end-to-end speed

7 Blockchain establishes a secure, shared source of truth to help build trust

8 Teamwork builds trust, and trust builds speed. - Lt. Gen. Russel Honore, U.S. Army (ret.) What could you and your team do faster if you had a blockchain enabled across your ecosystem?

9 How did Microsoft build teamwork and use that speed?

10 Engage customers The need The traditional bank guarantee process is laborious and slow. Physical documents can be lost or destroyed. The impact A blockchain-enabled platform streamlines the guarantee process and improves customer satisfaction overall by facilitating: Secure collaboration on digital documents Minimized need for in-person meetings A much shorter process overall

11 Empower employees The need Thousands of hotel bookings every day pass through multiple operators, which can lead to discrepancies. Booking errors negatively affect customers experiences and undermine trust between Webjet and its partners. The impact Employees can correct those errors themselves. The use of blockchain removes data inaccuracy, boosts security and efficiency, and enhances trust and accountability between Webjet and its partners. Webjet has an exciting opportunity to grow by facilitating transactions across the travel industry and selling its solution into other sectors.

12 Optimize operations The need The traditional process to assess creditworthiness and issue credit to partner-sellers took several weeks and involved many manual verification steps. This process made it difficult for sellers to operate effectively, which could have serious financial impacts. The impact Microsoft Treasury was able to digitize and automate the credit assessment process, cut approval time to just a few days, reduce counterparty risk, enhance audit transparency, and improve predictability of working capital.

13 Transform products The need Marine insurance is one of the least efficient categories of insurance. There are so many factors that could go wrong, it can be difficulty to accurately assess risk; so insurance is often managed through a complex web of underwriters. Lack of visibility also means that it could take years to settle claims. The impact Using blockchain, insurers have real-time visibility into a ship s location and cargo condition, making it much easier to accurately assess risk. This opened up the potential for a new service line in maritime insurance, and can reduce the claims settlement process to just a few hours.

14 Appropriate blockchain applications have similar patterns, across industries Manufacturing Retail Insurance Banking and Capital Markets Government Health Asset tracking Real-time auction for supplier contracts Supply chain transparency Dynamic commodities pricing Loyalty tracking Product provenance Logistics management Digital rewards P2P selling Ticket purchases Claims management MBS/Property payments Fraud detection Automated underwriting Risk visualizations Audit compliance Bond issuance Trade finance Loan syndication Post trade settlement Global payments Derivatives trading Licensing and ID Benefits distribution Aid tracking Military security Voting Copyrights Personalized medicine Records sharing Compliance Agricultural authentication Pharmaceutical purity KYC/AML Asset Transfer Cross-Organizational Workflow High Assurance Audit

15 How do you want to use that speed?

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17 Azure Blockchain: Development Principles Flexible blockchain on your terms Start with what you have use any ledger you want from experimentation to full deployment Integrated designed for extensibility Start where you are any OS, data source, or cloud service connect to the apps you use now Scalable innovate with confidence Built to grow on the enterprise foundation of Azure on-premises and in the cloud 50 regions worldwide

18 Come talk to us, wherever you are on this journey Visit our Azure Blockchain Solutions Page Learn more at the Azure Blockchain Blog Contact us to connect with a blockchain expert Join the conversation on Azure Advisors

19 Thank you for your time. Director of Business Development for AI Wendy Spies

20 Shared data simplifies processes like supply chain management FOOD PROCESSOR SMART CONTRACT The package has to be maintained at Temperature < 10º C Humidity < 65% CARRIER 1 CARRIER 2 RETAIL STORE 11ºC 66% PRODUCER WAREHOUSE SMART CONTRACT UPDATED SHARED LEDGER Origin 8ºC 60% Warehouse 9ºC 64% Carrier 2 9ºC 64% Store 11ºC 66% Milk producer supplies Milk to Food Processing Company The milk product is sealed in an IoT enabled package for shipping Carrier 1 delivers milk to Warehouse 1. The temperature of the package is within prescribed limits on arrival. The package is still within prescribed temperature limits when Carrier 2 arrives to retrieve it for delivery to Retail Store. The conditions of the contract have been violated. Carrier 2 is liable for penalty as the temperature of the package when it reached the retail store was above the prescribed limit The terms of shipping are registered using a smart contract on the Blockchain

21 Shared data simplifies processes like issuing a letter of credit Applicant Amendment Negotiation Initial Contract Negotiation Accept Terms and Provide Issuing Bank Details Agrees to Buy Beneficiary Tracks security to expiration date so long as customer maintains payment schedule. If customer defaults, pursues claim with Advising Bank Reviews SBLC for Treasury Processing Inform Advising Bank in case of Customer default 1. Applicant agrees to transact with Beneficiary via SBLC 3. Applicant bank issues SBLC Issuer 5. SBLC activated with expiration date; transaction complete Beneficiary Requests SBLC Validates and Approves Issuing Bank Resends SBLC Sends SBLC Reviews SBLC Again for Treasury Processing Provides SBLC Terms Submits Application Sends SBLC Applicant Advisor Initial Contract Negotiation Amendment Negotiation Issuer Forwards Amendments Advisor 2. Applicant submits SBLC request to the ledger 4. Beneficiary bank reviews and advises SBLC Old process: 3-5 weeks New process with blockchain: 3-5 Days By working with Bank of America Merrill Lynch on cloud-based blockchain technology, we aim to increase efficiency and reduce risk in our own treasury operations Amy Hood, chief financial officer at Microsoft