BLOCKCHAIN REVOLUTIONALIZING THE MSMES AND E-COMMERCE SECTOR.
Invented back in 2008, the blockchain technology has depicted the change that it can bring in different business areas. The technology, even in its infancy, has disrupted different industries and sectors. Various features of Blockchain such as decentralization, immutability, and transparency make it appealing for business sectors and domains all across the world. One such industry that is leading the way in exploring the potential of blockchain is the MSMES AND E-COMMERCE SECTOR.
Though there are several roadblocks in the way currently, it can be surely said that Blockchain holds the potential to transform the sectors by reducing potential costs and labor savings. According to a PwC report, 24% of financial executives from all around the world are very familiar with blockchain technology, with Asia and Europe significantly more familiar than those from other regions. Observing the wide-reaching implications of the technology, companies are constantly researching to find out the ways of applying blockchain in multiple sectors.
Talking specifically about the MSMES AND E-COMMERCE SECTOR , hundreds and thousands of funds are being regularly transferred from one region of the world to another within each day. This makes the global financial system one of the most popular sectors that could be benefited through the application of Blockchain.
HOW BLOCKCHAIN IMPROVES MSMES AND E-COMMERCE
Blockchain technology possesses all the attractive characteristics needed by a reliable technology involving money matters. It is safe, secure, decentralized, transparent as well as relatively cheaper.
Blockchain provides a very high level of safety and security when it comes to exchanging data, information, and money. It also allows users to take advantage of the transparent network infrastructure along with low operational costs with the aid of decentralization.
FRAUD REDUCTION; The involvement of money in any situation leads to increased chances of fraudulent activities. And for an overall sector operating on the very base model of money, security is of utmost importance. More than 40% of financial bodies and intermediaries including money transfer service providers as well as stock exchanges are susceptible to heavy losses relating to economic crimes annually.
KNOW YOUR CUSTOMER (KYC); financial institutions are strictly concerned about the increasing costs that they have to bear in order to comply with AML and KYC i.e. Anti-money Laundering and Know Your Customer norms. All these processes consume a lot of time and have to be performed individually by all the banks and money based institutions
TIME; Blockchain can reduce processing time, eliminate the use of paper and save money while ensuring transparency, security, and trust. These are the key benefits of blockchain in trade finance. Removing bad actors and forcing everyone to play fair in a new transparent way of doing business will virtually eliminate the risk of manipulation by participants in the chain.
A growing number of human resource departments now understand the utility of using blockchain technology to modernise some aspect of their hiring process to keep pace with the world. Some of them find the technology incredibly helpful in doing verifications of credentials of their employees and job applicants.
Thanks to the advent of blockchain technology, it’s now possible to keep track of all transactions on the web. E-commerce businesses can track all payments from customers and streamline their operations in a smooth manner. This will also provide amazing help with refunds. For that reason,cryptocurrency payment are on the rise as they can ensure efficiency and flexibility to online businesses.
The Tokoin Blockchain Solution for the Msmes
Some blockchain implementations, like the one being developed by Tokoin aim to solve the identity numerous problems for small businesses by allowing the businesses themselves build a reputation profile consisting of the data their business generates. Each business’ principal begins by identifying themselves to the system and undergoing a strict know your customer review. That serves to establish baseline credibility for the business, which they may then augment by adding things like business transaction data (both sales and supplier transactions) and any other relevant operational information. From that point on, the business will have a verified and secure digital financial trail — tailor-made for lenders and even suppliers to use as a basis for extending credit.
Blockchain’s enabled crowdfunding has changed the way SMEs gather investments, accounting for over 34.4 billion dollars in 2015, according to Mossolutions 2015 crowdfunding report. Crowdfunding provides an excellent way for creative projects to find cash. Many small or obscure projects which lay outside the scope of traditional investments are at ease after the inception of crowdfunding. Blockchain-based crowdfunding seems to be a game changer because it decentralizes the fund gathering model. The token represents a share in the project and just like a normal share in the stock market they have the potential to go up in value. These investments are referred to as cryptoequity.
Tokoin blockchain solution could be the breakthrough technology that the small business lending sector has been waiting for is that it may be used to create a trusted global lending network, which would allow cross-border funding options that would have been impossible before. For example, a blockchain network could connect banking institutions in financial centers like indonesia and china with small businesses in the emerging economies of Asia
Finally, a strong vision of the desired future is essential to drive an organization forward with blockchain. To accommodate change, it is critical to revolutionize everything from mindsets, systems and processes to business models and ecosystems. Successful transformation will help ensure that the network will not merely survive the transition to the blockchain, but also dramatically cut complicating intermediaries, reduce cycle times and increase efficiencies. Organizations that achieve these goals will be the leaders in the blockchain-enabled, digitally transformed supply chains of the future. Also, blockchain technology will drastically change the future of investment done by SME in the coming five years.
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