With many companies in the midst of digitization, some of them are already starting to integrate blockchain into their transactions in order, above all, to speed up processes and ensure the security of their customers.
Transactions are an example of its multiple applications, ranging from storing any type of information to guaranteeing the origin of a food product. Among all of them, we are going to talk in this post about how contracting has evolved with digitization and the emergence of blockchain, as well as the advantages of using this technology.
The evolution towards blockchain technology
Traditionally, in an offline process
offline
When our customers wanted, for example, to take out an insurance policy or any other service, they had to go to the nearest branch or office. The entire process was entirely manual: identification, assessment of the client’s creditworthiness, generation of the contract, signature, traceability and storage. Among all the processes, we highlight storage, since, being paper-based, there were two main problems: the high cost and the frequent loss of documents. In addition, a manual process would incur possible customer identification errors or even manual errors by the personnel generating the contracts.
Thanks to the digitalization of processes, they have become more efficient and secure. Customer identification is more reliable, as there are, for example, facial recognition solutions that can confirm the customer’s identity by comparing it with the customer’ s ID photo in a matter of seconds. The same applies to the generation and signing of the contract. Today it is generated in a pdf and the client can sign and send it from anywhere thanks to electronic communications and signature. Of course, in this case the traceability is more complete, being able to perform a screen-by-screen visual audit of the process. Custody is also more secure and cost-effective, as signed contracts can be stored on a server or in the cloud.
However, digitization has also generated a new concern for companies: the security of the information they manage in the face of increased cyber attacks.
With the advent of
blockchain
the procurement process can be provided with an extra layer of security. First of all, we must talk about identity. Customers would have an identity within the blockchain. Today there is already talk of self-sovereign identity, through which the user can manage his own identity and decide what data will be available to the company. The Alastria ID, based on Uport, will offer the user this possibility.
Likewise, the assessment of the customer’s creditworthiness would be immediate, since there are credit companies that are already within blockchain. This leads us to talk about contract generation, now even more advanced thanks to Smart Contracts.
Smart Contracts
. These smart contracts, which Ethereum has created, are automatically executed on blockchain, as they have the user’s data available to them on the network, and automatically interpret the terms and conditions specified in the contract. In this way, the Smart Contract collects the data of the customer applying for credit, independently checks the creditworthiness through the credit company’s oracles (these guarantee that the customer is creditworthy) and, if the conditions of the contract are met, the contract is automatically generated.
The user will be able to formalize the contract immediately thanks to its PKI(Public Key Infrastructure), which allows cryptographic operations such as encryption or electronic signature.
The contract is fully guaranteed thanks to the blockchain network. This technology, which acts as a distributed ledger, generates blocks of information in which data on all transactions are recorded in encrypted form. In addition, a blockchain network is a decentralized system composed of several nodes, all of which are backed up. Therefore, we could say that the contract is inviolable.
As we have already mentioned, since it is a decentralized system, the information is not located in a single space, thus remaining more secure from hackers.
hackers
or possible damage to the servers. All this is possible thanks to IPFS technology, which makes a copy of the generated pdf to send the contract to our customer. In this way, the contract is always available to both parties (company and customer) and potential conflicts arising from its loss, falsification or alleged legal breach are avoided.
Commenting on the online contracting process with blockchain, the advantages of using this technology can be easily deduced. The main one is the layer of value in terms of security and transparency that it brings to our processes, above all, the guarantee that it offers to the client regarding the management of their personal data. In addition, we could mention accessibility, as both the company and the client can immediately access any of the documents found in blockchain. Of course, the significant cost savings and error reduction, for example, as we have seen, thanks to automation through smart contracts, should again be emphasized.
Considering these above advantages, we could say that contracting with blockchain is an incorruptible, error-free and fast process.
Processes at present
Currently, MailTecK & Customer Comms is working on blockchain with the Ethereum-based Alastria network when designing custom solutions for online contracting processes. Thanks to its expertise in the automation of personalized multichannel communications and this blockchain network, MailComms can not only develop personalized recruitment processes, but also implement complex onboarding processes.