Discuss abou the Skills for Information and Communication Technology.
The organization started its journey as a community bank in rural New South Wales (NSW) and the primary customers were from the retail sector. Now it has clients from retail and corporate sectors as well. Today it has various retail branches within NSW and online business operations. The Head Office of the organization is based in Sydney. The organization is now planning to explore the business to other States of Australia and to the Oceania region, as well as expand its e-commerce activities in the coming five years.
Feedbacks and reports have been collected from various client organizations to understand the problems from the root. After reviewing all the reports it is find out that the major issue that the organization needs to consider is that it should improve the database security and the capacity as well to serve more clients effectively and securely. The purpose of the report is to conduct a detailed research on the blockchain technology and its implications in finance and banking industries. Two other sectors including hospitality and supermarket industries have also been considered to review the performance of the technology and based on the research three blockchained based applications will be suggested considering the problems the organization is facing currently. The report also explores several risks associated with the technology to help the organization to understand ethical, social and legal issues associated with the technology.
The report will discuss about the following topics:
Block chain technology in various sectors
Hospitality sector
Potential risks associated with blockchain technology
Blockchain technology in banking sector:
Benefits of the technology:
Blockchain can be considered as a relatively new technology that enebales financial transactions to be executed more securely and transparently. Blockchain is a web-based end–to-end transaction services. All the users in the network have access to the the copies that contains financial transactions. This implies that there is no need of indipendent verifications by the third parties for the transactions to take place (Barber et al . , 2014).
The bitcoin blockchain can be considered as one of the initial sectors where the technology has found the most successful implementations (Eyal et al . , 2016). Despite the fact that the technology was first intoroduced to meet the craze of bitcoin , the applications can be introduced for finanncial activities in the real world as well as specified in the article.
The Global Economic Forum has mentioned the Blockchain as a phenomenal technology developed in recent years. The technology has seen a continious growth in investment, specially from banking sectors Blockchain technology has the potential to make financial transactions less costly thus contributing to greater profit (Pilkington , 2015). Moreover, the recuirement for a central authority is also omitted as portion of the bolockchain is rerserved in nodes and The process does not use central database to store records which makes it difficult for individuals to misuse the confidential data as suggested by the author.
According to the study done by IBM, global financial organizations are facing various issues with the traditional transaction systems currently in practice (Miller , 2017) . The article also reveals that the middle parties involved in these transactions demands a hefty amount, and users involved in the process does not get access to the same information. Due to this, financial transactions are getting more complex, and costly as well. The study also suggest that adoption of blockchain technology will not only increase the efficiency of the transactions, but will make it more secure and transparent
Recent development :
Some tech companies and startups are working to deliver blockchain based products (Lewenberg , Sompolinsky & Zohar). According to the article, Paul Taylor, a former engineer at Google is developing a block chain based operating system for banking sector called Vault Os. Microsoft has partnered with Bank of America to develop a blockchain powered framework that can be brought to market to offer to organizations for purchase and project Bletchely is another blockchain based product by Microsoft based on Azure , a cloud platform by Microsoft (Azure.microsoft.com, 2018). IBM recently launched a cloud based blockchain platform to make secured transactions online and recently , Citibank has funded a blockchain startup called Cobalt to support their development (Vigna & Casey , 2016 ) .
Application of the technology in the sector:
In October 2017, a new milestone was achieved in the traditional banking industry when 88 Bales of cotton were purchsed for $35,000 in a cross border blockchain based trade (Portes & Rey , 2015). The report specifies that The R3 association is a firm devoted to popularize the adoption of blockchain all over the world by making it more first , secure and accurate. R3 is constantly searching for ways to implement smart contracts, that can help transactions to be performed automatically provided that the certain predetermined conditions are met successful by the parties involved sucessfully.
Singapore developed a pilot project by using blockchain technology for interbank transactions earlier 2017 (Manelli & Smith , 2017). According to the article, the Singapore Central Bank, eight local and foreign banks, as well as the stock exchange took participation in the pilot project. Singapore is looking to attract investment in the fintech sector, and the blockchain pilot was a part of that effort. Cross border foreign currency transactions were also used to review the the pilot project. The R3 association helped Singapore to conduct the pilot test. Governments and Industries all over the world are preparing to take the advantage of the technology as it promises to be a game changer for the digital currency in the coming years as specified in the article..
Clearing and settlement is one of the primary areas where blockchain can be used effectively (Ft.com, 2018). According to this report the websites and related securities that is used to keep track of records related to all kind of loans involves billon dollar of investment by the banks. According to a report published by Accenture , blockchain can help banks to reduce the cost up to 10 billion dollar by making clearing and settlement services more improved and efficient and there is a huge potential of the technology to reconstruct the sector on a serious note (Accenture.com, 2018). The report also mention that one of the best known examples of the reconstruction is the Australian security exchanges which targets to execute a major portions of the clearing and settlement services by using blockchain system and project is currently supervised by Digital Asset Holdings .
Block chain technology in financial industry:
Benefits of the technology:
Blockchain technology is getting a lot of attentions in the financial sector in the recent years as it comes with the potential to reduce fraud in the financial sector (Tapscott & Tapscott , 2017). The article mentions that around 45% of the financial institutions like stock exchanges as well as money transfer services suffer from economic crime each year. Most of the financial services deals with centralized database which is prone to cyber attacks and once the attackers get access to the data base they can penetrate even deeper into the system to steal confidential and valuable data worth cores as specified by the authors.
The article also describe that blockchain basically consist of several blocks where each transaction is identified with a timestamp and each block is linked with the previous block .Due to this it will be much more convenient to find any abnormal activities within the transaction.
Application of the technology in the sector:
Know your customer(KYC):
Financial organizations spend almost 60 to 500 million dollar just to maintain their KYC services. It help the organizations to verify the identity of the customer to make ensure that in future they does not have to faces issues like money laundering as well as terrorism activities. the use of blockchain will enable to verify the customer independently when one organization need to access the information that has already been used by another organization and the process need not to be started over again. Due to this the administrative cost will significantly reduce (Gill & Taylor , 2016).
Smart contacts:
Due to the ability of the blockchains to store any form of digital information, it can be used to store computer code as well. The code can be executed only when two or more participants enter their keys successfully and correctly. This feature can help to make smart contracts which will enable to perform financial transactions automatically without compromising the security of the system. Transactions will be only possible once the criteria is followed properly like a customer will only receive invoice after the delivery is made successfully (Buterin , 2014).
Blockchain technology in supermarket industries:
Benefits of the technology:
The blockchain technology has recently began to gain a lot of popularity in the grocery retail which happens to be one of the major consumer market globally. Major companies and producers are showing interest to invest in the technology as it comes with lot of benefits. It has the potential to the make supply chain transparent and improve methods to trace products. Additionally it can make auditing decentralized and reduce cost across industries ( Swan , 2015).
Application of the technology:
Payment and transaction:
In order to improve the shopping experience of the customers retail chains have adopted various payment methods : starting from cards to digital payment wallets companies has tried to include all. The major problem the companies were facing to incorporate the digital payments method into their system was that they had to partner with various third parties to make digital payments possible. Due to this companies has to invest a lot of amount to get the third party services which does not allow it to have independent access over the system. With the help of the blockchain technology retail companies can develop a digital payment ecosystem with full access over the system.
Logistic and supply chain:
Logistic and supply chain is the next potential area where blockchain has promising applications. From homestead to fork, blockchain innovation gives trustworthiness, credibility and security for the information as things travel through the inventory network. These records are time-stamped and carefully designed. Moreover, they are autonomously evident by all individuals and gatherings enabled access to the information (Kuptiyanovsky et al . , 2017).
According to the article ,a blockchain-based coordinations and inventory network administration framework offers control over how, where and when the item is created, transported, put away, conveyed and exhibited to the end consumer. Blockchain-based approach empowers trust to be fabricated rapidly and debate to be settled in a straightforward way.
Food safety:
Huge organizations like Wallmart is putting weight on providers to utilize blockchain will move a colossal swathe of the nourishment world into one sorted out framework. That is no little accomplishment when ranchers, processors, wholesalers, and retailers are at present utilize diverse sorts of documentation to track their items—some of them still on paper (del Castillo , 2017).
The article specifies that under the new framework, if a customer falls sick from E. coli followed to a bunch of lettuce, a sustenance security specialist could possibly check a standardized identification on the bundling to rapidly take in where it originated from and where other lettuce from a similar group went. Retailers will have the capacity to rapidly expel sullied items from racks, along these lines ceasing the spread of sicknesses.
Use of blockchain in hospitality:
Blockchain can give significant advantages to the accommodation chain. For a huge chain with a huge number of providers and many establishments, it gives top to bottom perceivability of the nature of acquisition of the store network (Lanz & Carmichael , 2015). According to the article, establishments can utilize this information to advance the production network, bringing about increment of primary concern for ventures and the establishments. As each exchange’s information is changeless and secure, it spares important time in debate determination, exorbitant printed material, and process time. Along these lines, blockchain innovation helps make the backend forms effective, and enhance mark esteem and client encounter.
Being a youthful, as yet advancing innovation, there are certain parts of the innovation that may require further advancement or change to achieve its expected potential. A similar instrument that gives trust to an open blockchain additionally acquaints dormancy with the network (Anon, 2018). According to the report, Exchange confirmation requires agreement: agreement requires some measure of calculation, and calculation requires significant investment. Accordingly, exchange handling isn’t immediate and can frequently take a few minutes. Certain convention outlines have diminished the preparing time to not as much as a moment, however constant handling is still restricted with current models. Accord and calculation likewise constrain transaction throughput. Exchanges on an open blockchain require to come to accord with countless members, which requires time. Permissioned blockchains or existing exchange stages, in any case, do not have similar impediments considering their unique trust models as mentioned in the given report.
Conclusion:
The purpose of the report was to find the problems that the organization was facing to execute the online the business model and additionally find solutions to address those issues. Based on the report it was find out that the main problem with the organization has been lack of security of database and additionally the payment platform was also not secured and flexible which are the most important factors for a online business to be successful. In accordance with the problem it can be concluded that the company should adopt blockchain technology as it has the potential to address those problems effectively. Even though the technology has a lot of drawbacks provided the technology is fairly new in the market, but the potential growth possible with the invention can not be overlooked. The current application of the technology in various sector like banking, finance , supermarket and hospitality industries and the way it has influenced or promise to bring changes in those sector confirms the same.
For the company to expand the ecommerce business it should make the following considerations like secure payment system, database capacity and integrity, improved logistic systems and cost effectiveness. Based on the report some strategic recommendations is provided.
To improve the database system in terms of security and capacity it is recommended that the organizations should use blockchain based platform. The organization should consider using IBM cloud based platform as it provides the much needed security for protected database
To make the delivery of products faster and transparent block chain based smart contract technology is recommended .
To make transaction secure and effective company should focus on developing own digital payment ecosystem which will again reduce the cost of third party collaboration. Blockchain is a definite solution in that case.
To reduce the cost to verify consumer identity digitally blockchain based KYC system is recommended to adopt in practice
References :
Accenture.com. (2018). Blockchain Solutions for Financial Services | Accenture. [online] Available at: https://www.accenture.com/in-en/service-blockchain-financial-services [Accessed 24 Jan. 2018].
Anon, (2018). [online] Available at: https://Lanz, L. H., & Carmichael, M. (2015). Digital marketing budgets for independent hotels Continuously Shifting to Remain Competitive in the Online World. [Accessed 24 Jan. 2018].
Azure.microsoft.com. (2018). Blockchain technology | Microsoft Azure. [online] Available at: https://azure.microsoft.com/en-in/solutions/blockchain/ [Accessed 24 Jan. 2018].
Barber, S., Boyen, X., Shi, E., & Uzun, E. (2015, February). Bitter to better—how to make bitcoin a better currency. In International Conference on Financial Cryptography and Data Security (pp. 399-414). Springer, Berlin, Heidelberg.
Buterin, V. (2014). A next-generation smart contract and decentralized application platform. white paper.
del Castillo, M. (2017). Walmart, Kroger & Nestle Team with IBM Blockchain to Fight Food Poisoning.
Eyal, I., Gencer, A. E., Sirer, E. G., & Van Renesse, R. (2016, March). Bitcoin-NG: A Scalable Blockchain Protocol. In NSDI (pp. 45-59)
Ft.com. (2018). Five ways banks are using blockchain. [online] Available at: https://www.ft.com/content/615b3bd8-97a9-11e7-a652-cde3f882dd7b [Accessed 24 Jan. 2018].
Gill, M., & Taylor, G. (2015). Preventing money laundering or obstructing business? Financial companies’ perspectives on ‘know your customer’procedures. British Journal of Criminology, 44(4), 582-594.
Gill, M., & Taylor, G. (2016). Preventing money laundering or obstructing business? Financial companies’ perspectives on ‘know your customer’procedures. British Journal of Criminology, 44(4), 582-594.
Kupriyanovsky, V., Sokolov, I., Evtushenko, S., Dunaev, O., Raspopov, V., Namiot, D., … & Kupriyanovsky, P. (2017). On mobile production based on a shared economy, digital technologies, and logistics. International Journal of Open Information Technologies, 5(8), 47-69.
Lanz, L. H., & Carmichael, M. (2015). Digital marketing budgets for independent hotels Continuously Shifting to Remain Competitive in the Online World.
Mainelli, M., & Smith, M. (2015). Sharing ledgers for sharing economies: an exploration of mutual distributed ledgers (aka blockchain technology). The Journal of Financial Perspectives, 3(3), 38-69.
Miller, R. (2017). IBM unveils Blockchain as a Service based on open source Hyperledger Fabric technology. Retrieved April, 14, 2017.
Portes, R., & Rey, H. (2015). The determinants of cross-border equity flows. Journal of international Economics, 65(2), 269-296.
Swan, M. (2015). Blockchain: Blueprint for a new economy. ” O’Reilly Media, Inc.”.
Tapscott, A., & Tapscott, D. (2017). How blockchain is changing finance. Harvard Business Review, 1.
Vigna, P., & Casey, M. J. (2016). The age of cryptocurrency: how bitcoin and the blockchain are challenging the global economic order. Macmilla
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