Blockchain could transform CX – here’s why people aren’t using it (yet)
From buying a house to managing your health, blockchain could help transform almost every aspect of customer experience (CX). Danny Bluestone, founder and chief executive officer of digital transformation agency Cyber-Duck, looks at why blockchain has such CX potential – and why it’s not yet always the answer.
Cyber-Duck’s Danny Bluestone on blockchain’s revolutionary potential for CX / Shubham Dhage via Unsplash
CX in 2022 is a game of two halves.
On one hand, we have a cashless society where you can shop and travel just using a mobile.
On the other, some banks still require mortgage forms by fax; pregnant women carry around antenatal notes folders; house buying involves never-ending paper trails; and it’s almost impossible for environmentally-conscious consumers to understand what’s in the things they buy.
For many of these experiences, blockchain could provide an answer.
What is blockchain anyway?
Blockchain is a distributed digital ledger of data in which account transactions or activities are recorded. Every time a new piece of information is added to the ledger, it’s recorded, locked by encryption and saved as a ‘block.’
The block contains the cryptographic hash – data translated into a string of letters and numbers (like Bit.ly does to long URLs) and a timestamp. Through this hash, each block contains information about the previous block, ‘chained’ together. Typically, the encryption uses a public/private key model, with the public key freely available, but only the blockchain owner’s private key can access it all. Only the latest version can added to (not altered).
Blockchain is decentralized across user devices or ‘nodes.’ Everyone in the blockchain has a copy of the same encrypted data. If someone tries to alter the data, or it gets corrupted, it automatically shows up in the hash.
Enough geekery – how does this relate to CX?
Blockchain enables vast amounts of data to be shortened and chained together, theoretically without being tampered with, over long periods of time and shared with multiple users while maintaining privacy – perfect for the long data series that deliver great CX.
Take house buying. A property’s blockchain would contain all relevant information – structural survey results, electrical certificates, boiler installation records. The estate agent, solicitor, vendor and buyer are all able to access the information digitally. No more waiting for physical paper files to be sent in the post, no more surprises about knotweed or boundary discrepancies.
In healthcare, potential CX benefits are particularly pronounced. In the NHS, most hospitals and surgeries have their own health records system. Some are digitized, but many aren’t, and the data isn’t ‘portable’ because each is coded entirely differently. That’s why expectant mums still carry paper folders. They’re portable.
Blockchain could enhance preventative healthcare, as electronic healthcare records (EHRs) can be analyzed by artificial intelligence (AI) like in Estonia (which has used it since 2016).
And in supply chains, Estée Lauder uses blockchain to let customers trace the vanilla in its beauty products from farm to bottle, highlighting environmental and social impacts. This is a great way to respond to consumer demand for sustainable goods and enhance trust with brands.
If blockchain could be so transformative, why isn’t it being adopted wholesale?
1. It’s complicated
Hailed as part of the web3 movement and a new(ish) technology, there just aren’t many skilled practitioners and service providers. It’s hard to explain the benefits over legacy digital solutions, let alone implement at a high price.
2. It can be slow and hard to scale
Because blockchains are huge, distributed and encrypted, transactions take much longer. The more nodes there are on the network, the worse the problem. Developments in processing speeds will improve this, but it’s a barrier.
3. There aren’t any common standards
There are over 6,500 projects using bespoke solutions with their own set of protocols, code languages and privacy structures, making them mostly incompatible.
4. Lack of governance and a bad reputation
Like all emerging tech, governance can’t keep up. There is limited legislation and regulation, making blockchain more likely to have security issues – risky for sensitive data such as health and finance. Blockchain is also viewed as a bit Wild West, almost synonymous with Bitcoin and its negative connotations with money laundering and dark trade.
5. Transparency can mean a lack of privacy
A great strength of blockchain is the public transparency and verification of transaction history. But for users, it could expose sensitive information or trade secrets. Solutions to balance both must be found.
6. There’s (potentially) a huge environmental cost
The way most blockchain is structured requires users to solve complex mathematical proofs to use it, with enormous processing power and energy. Bitcoin alone uses more energy than Finland. Other structures such as Proof of Stake are possible but not yet widely adopted.
If we were to rebuild the digital world entirely from scratch for massive-scale data challenges and brilliant CX, we might well do it on standardized, highly-regulated blockchain technology. But in practice, in 2022, it’s a bit like using a sledgehammer to break a nut, with minimal extra benefit compared to using an excellent database with good infosec protocols. It’s about using it in the right way for the right user case. For most businesses, blockchain is a wait and see.
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Cyber-Duck
Established in 2005, Cyber-Duck is a leading digital agency that works with exciting startups and global brands such as Cancer Research Technology, The European...
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