Optimizing Claim Management through Blockchain

Private blockchains and distributed ledger technologies are already being leveraged to improve business models and processes in both startups and leading enterprises including P&G, Walmart, JPMorgan, IBM and more. Walmart, for example, is well-known to be working towards bringing its food supply onto blockchain to ensure that every product on the shelf can be traced to its origin.

Supply Chain however is just one business process that can harness the power of blockchain. At LimeChain, we recently worked hand in hand with P&G, as their blockchain consulting and development partner, to tackle one of the most common business processes out there – B2B claim management. A task so mundane, yet so costly in terms of human resource, time and often customer relationship.

Current claim management problems

Claim management in a business to business environment is a process which occurs to any company delivering large volumes of physical goods to an extensive customer pool. This includes the FMCG / CPG industry, Retail, Fashion, Logistics etc. While we’re currently in the age of technology and innovation, the process of claim management is still largely a manual one. Once there is something wrong with a delivery/order, the customer fills out a claim which has to be manually reviewed by an operator (who has to check the contract/order) etc. The whole process may even involve third parties solving disputes. This is largely inefficient and ripe for disruption. In a nutshell, the current issues of claim managements are:

  • * Time and cost inefficiencies caused by manual work
  • * High number of claim disputes due to lack of common trustworthy contracts platform
  • * Incurring costs due to the need of third party to judge claim disputes
  • * Revenue loss due to reduced levels of trust and customer retention

How does blockchain fit into all of this?

Through a private blockchain (namely HyperLedger Fabric) and smart-contracts (self-executing contracts written in code), businesses are able to automate a large chunk of the claim management process, saving costs and building trust with their customers in the process. The solution basically works in the following way:

  • 1. A web application that enables trade counterparties to define and store contract terms on the blockchain in a cryptographically-secured way
  • 2. Counterparties can fill out claims when there is something wrong with an order
  • 3. Validity checks of incoming claims are automated based on the predefined contractual terms

The blockchain is restricted, meaning two counterparties can access information that’s shared only between themselves. The application makes it easy to add/remove counterparties.

Benefits of using blockchain for claim management

  • * Reduced operational costs
  • * Improved efficiency of claim processing
  • * Reduced overall claim disputes
  • * Fraud prevention and security
  • * Increased customer satisfaction and retention
  • * Increased ROI

The potential implications of this solution are huge for a number of industries. However, when it comes to enterprise applications of blockchain, that’s just a drop in the bucket. At LimeChain, we work with leading enterprises on a daily basis as a blockchain development and consulting partner to optimize their most pressing business issues. Don’t hesitate to drop us a line and talk about potential blockchain uses cases for your industry!

About us: LimeChain is a blockchain development & consulting company helping both enterprises and blockchain-native companies harness the power of distributed ledger technologies. With over 20 products shipped and a dozen of developer meetups hosted, LimeChain is on the cutting edge of the blockchain industry.

 

 

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ABOUT THE AUTHOR

Zhivko Todorov