Blockchain introduces alternative methods to track and manage customer data. It leaders need to understand the development direction of decentralized technology, otherwise there is a risk of falling behind.
Today, many industries are affected by data abuse and privacy violations. Among the disturbing news are new terms such as “surveillance economy,” where customers sacrifice data privacy for “free” services. In order to reduce this impact, a series of legislation, such as the California consumer privacy act, give consumers the right to know the data that enterprises are collecting and ask them not to sell. Technical solutions such as blockchain technology progress are less discussed, but may be more powerful.
As Gartner defines it, “blockchain is an expanded list of encrypted signatures and irreversible transactions shared by all participants in the network.”
Because these time stamped records are scattered and immediately copied among all participants, the difficulty of cracking the blockchain will be multiplied. Blockchain is also more transparent: anyone with access rights can learn about transaction events at any time in their history.
For enterprises, from the perspective of security and single point of failure, the centralization of customer data will bring risks. Centralization also represents restrictions on new business models and customer dynamics.
Because the blockchain ensures the invariance of records and enables records to be tracked without centralized management, an alternative method of tracking and managing specific customer data can be introduced. This is especially true when increasing the cost of data sources and the consequent liabilities outweigh the benefits. Given the exponential growth in the use of customer data by emerging technologies such as artificial intelligence and the Internet of things, all of these are highly relevant to users.
In addition, blockchain user experience (UX) / user interface (UI) technology is gaining attention, but it is still in an emerging stage. Blockchain user experience (UX) / user interface (UI) technology will soon participate in the fierce competition, just like the competition of Internet standards, which produces today’s Internet standards.
Requires “atomic” interoperability
Many people think that blockchain has revolutionary economic and social behavior potential, and eventually becomes the foundation of digital society.
But users don’t have to worry about whether they can choose the right platform smart contract language, and they don’t have to worry about the system interface or consistency algorithm.
In short, the day of seamless blockchain interoperability at the “atomic” level is yet to come.
Many people have not yet experienced the cross blockchain function. In this case, the smart contract can update multiple blockchain platforms with a single process. These required features will not be mainstream for at least three years.
The good news is that people are seeing some promising developments that will help to get closer to this final state, with some caveats in mind. In the deployment of smart contracts, security and risk management should not be considered afterwards. Since transactions are immutable, accidental (due to code errors) or intentional (due to bad actors) damages cannot be “revoked”.
Competitors need to be involved
In 2020, most blockchain solutions include three elements of blockchain solutions: distribution, encryption and invariance. Often, these products focus on improving efficiency by simplifying existing processes. Gartner’s ongoing blockchain survey shows that most of the surveys do not include meaningful or productive cooperation with competitors, but rather close cooperation with established suppliers and partners.
Gartner has identified more than 60 publicly announced blockchain alliance plans around the world, and they are willing to open their participation to others. These consortia include banks, insurance companies, medical institutions, energy and utility companies, transportation and logistics companies, and educational institutions.
Gartner predicts that by 2023, a variety of blockchain technology standards will make the development and deployment of mainstream decentralized applications and smart contracts possible. As a result, CIOs from organizations exploring blockchain are likely to join such an alliance to acquire knowledge and test targeted use cases that require collaboration among multiple actors in the next few years.
Emerging customer driven blockchain
Until the technology matures, unless there is motivation to do so, enterprises will not choose decentralized customer driven blockchain information as data sources.
According to published privacy regulations (such as the EU’s gdpr), businesses may be fined up to $4 a year for violating these laws % This may be just one of the incentives to drive innovation toward decentralizing customer records.
Whether or not they are subject to gdpr regulations, enterprises can benefit from “design privacy”, that is, proactive measures to deal with personal data, such as data minimization, including deleting inactive or incorrect customer data.
Gartner’s research suggests that business leaders should do the following:
Consider customer driven blockchain to help reduce obstacles in customers’ journey. Supporting customer-oriented alliances can help meet growing customer concerns.
· quantify privacy and security risks, such as fines and cyber attacks on customer data, to help develop a business case for the blockchain. Design to protect privacy and minimize data risk.
Join the blockchain alliance and discuss the meaning of decentralized customer data with representatives of competitors and other organizations that may subvert the industry.
Blockchain technology is driving the era of “decentralization”, in which customers have their own data and decide how to use it, and it leaders should start to rethink their strategies.
Editor in charge: CT