By Mary Hall, Product Marketing Director, Oracle
Blockchain is changing the very nature of doing business, including how companies complete transactions with each other as well as with their customers.
Blockchain’s ability to increase transparency and trust is disrupting long-standing business models, and companies are taking notice. Knowing how to take advantage of blockchain and how the technology works is the key to harnessing its capabilities. Once you’re equipped with that knowledge, you can figure out how blockchain’s benefits best align to your strategies, as well as potential use cases that could improve performance in several areas of your business.
One business area beginning to see massive changes with blockchain technology is finance. Here are two examples of how finance departments can improve the way they work by using blockchain.
Oracle has regularly discussed the benefits blockchain can offer companies looking to solve common problems they face while trying to observe international law. Many of those benefits come from blockchain’s ability to maintain full records of every transaction. This can be especially transformative when blockchain is used along with a cloud ERP system, because it gives finance departments access to the technology’s cryptographic security and unchangeable recordkeeping, providing a full audit trail.
Blockchain can provide finance departments tools to expedite international transactions and significantly reduce the cost of those transactions. International
With a blockchain-based transaction, these transfers can be done in minutes or seconds at a fraction of the cost, without the need to involve a third party. ICS Financial Systems and Oracle worked to develop such a system for Arab Jordan Investment Bank. Using Oracle Blockchain Platform, AJIB was able to deliver nearly instant cross-border payments—down from two to three business days—with lower costs, higher security, and more reliability, responding to customer demand for convenience, speed, and simplicity of money transfers.
Most companies have ERP systems to manage their finances and operations. When blockchain is combined with these systems, finance departments can improve data integrity and monitor blockchain transactions in real-time. These benefits are particularly helpful when it comes to an area like supply chains.
In a recent market note, IDC looked at how Oracle is developing blockchain applications to allow a near-turnkey implementation. When blockchain is used to track materials flow and transactions across supply chains and between trading partners, companies have one record to access as a single source of truth. Transactions can’t be modified without all other parties on the blockchain knowing who tried to tamper with them, and teams have access to a time-stamped assessment trail plus real-time documentation across the supply chain. This transparency can increase trust between trading partners, improve regulatory compliance and reduce paperwork.
Moreover, the data from a trusted blockchain can flow automatically into Oracle ERP cloud, offering significant time savings to procurement and payables departments. Implementing a blockchain-based automated tracking system could save finance departments thousands of work hours and millions in cost savings, allowing those departments to tackle more complex projects.
These are just two of many use cases where blockchain can bring significant change to the way your company conducts business—reducing costs, provided enhanced security and streamlining financial transaction processes.