Nowadays, we realize more and more that the blockchain phenomenon has crossed the border of threat to become an opportunity to change. Fintechs, which were in part responsible for this boost, by using the several mechanisms provided by the various blockchain dimensions, have already gained their place and are now starting to influence their ecosystems. Maybe those who are not particularly interested in this matter can recall the encrypted currencies (like bitcoins) and wallets, that allow fintechs daily use. The media, however, have focused on less essential matters like its improper use (money laundering, tax evasion, etc.) and not on fintechs innovative and unique features: the transmission of trust between relationships or transactions.
As if this no longer exists in current financial world.
I’m not developing the definition of blockchain (there are articles, books and TEDx talks explaining it better than I do), but I would like to focus on an essential value, one of blockchain’s foundations: trust economy and the way GS1 standards will relate to that.
One of GS1’s main assets is the definition of standards enabling a global language between all players, therefore maximizing relationships effectiveness and security. And a variable criticism is the level of trust on the quality of transmitted information. Understanding ourselves is not enough. We must also trust the information we are sending to or receiving from others. In this sense, GS1 has performed a heroic and high-value task for us all. And a large investment has been made in the segment concerning the implementation of traceability standards applied across the health, transportation & logistics, and retail industries, among others. Gains are undeniable and tangible for sure. An excellent reference is the report “Strength in unit: The promise of global standards in healthcare” published by Mckinsey & Company, especially the chapter “Standards as a foundation for change” which tangibly and categorically reflects all advantages and savings the health industry would benefit from. Another report, perhaps more related to the assurance of product information quality, was published in 2016 by Accenture in collaboration with GS1 Sweden, about which I wrote a brief summary at the time, and which reveals profits of several million euros, in the last decade, arising from the implementation of GS1 standards.
Resuming the trust issue, in the beginning of March, 2017, the New York Times published an article called “Blockchain: A Better Way to Track Pork Chops, Bonds, Bad Peanut Butter?”, which could as well be another article about encrypted currency or associated with fintechs. Except it’s not. As described by its title, this article presents an application of the blockchain concept to a supply chain in which 3 globally significant players with different roles have verified the traceability of a set of assets. We are talking about IBM, a technology provider, Maersk, a carrier and logistic operator, and Walmart, the world’s largest retailer. Examples go from avocado to pork transportation. And these are only a few of the 400 IBM clients using its blockchain-related technology. There are some philosophical issues stating that this type of blockchain approaches should not be limited to a technology provider, or about where the information is stored. Let’s not focus on these, but on the essential that is the trust required for this sharing process.
This trust presents itself in a disruptive way, overcoming the B2B2G2C or B2B2C2G barriers… or so.
So, when we look at GS1’s role and mission – of being one of the key foundations in the definition of supply chain standards (retail, health, financial, etc.), and when facing the blockchain reality, which role should GS1 undertake? How to include its standards use in blockchain-oriented technologies and processes? And, simultaneously, how to capitalize the contribution that, in recent history, has allowed all players to benefit from this?
In fact, this question leads to a lot of other questions, and these must also be addressed in a disruptive and less traditional way. Should there be a blockchain process-oriented GS1 mechanism, whose use builds trust between players? Should it be a kind of token?
The truth is the lack of clear answers is not the root of the problem.
The problem relies in our delay in addressing them and realizing that several players are now trying to find their own ways to respond to challenges without us, as highlighted by this NYT article. And the challenge is not exclusive of GS1, but to the very existence of a standard that, at its limit, is replaced by several interactions that build trust.
Curious, isn’t it?
Translated into english from the original article published on Smartpayments News, 21/03/2017.