Cryptocurrencies are a hot topic these days, but the underlying technology might be even more interesting. Blockchain ledgers, which create long series of transaction records that are extremely difficult to change or otherwise hack later on, sit at the heart of every cryptocurrency that matters today. And many companies are working out new ways to use blockchain ideas to drive innovation in day-to-day business operations.
So let's take a look at three well-known companies that are considering blockchain-based operations right now -- with or without involving cryptocurrencies along the way. The names under my microscope here are payment processing veteran Visa (NYSE:V), financial data expert S&P Global (NYSE:SPGI), and medical testing guru Quest Diagnostics (NYSE:DGX) -- hardly the most obvious players in a blockchain future.
Standard and Poor's is treading lightly into the world of blockchain technologies.
Its energy and commodities-tracking arm, known as S&P Global Platts, recently launched a blockchain platform that provides a secure way to track oil inventories across the Middle East. Using smart contracts and built-in calculation tools, S&P Platts aims to lock down data security and eliminate human error in a revamped and highly automated inventory process. It's early days for this platform, but it might just be the next standard in this ultra-specific data niche.
"The innovation represents the next step forward in Fujairah's ambitions to become a global hub for commodity trading," said Salem Al-Hmoudi, a member of the local FEDCom regulatory group. (The Fujairah Oil Industry Zone "hosts the Middle East's largest commercial storage capacity for refined oil products," according to S&P Global Platts.) "It will allow our terminal operators to be at the forefront of technology while at the same time operating at the highest level of security."
S&P will use this service to learn more about blockchain ledgers and what they can do. In general, management thinks about this technology as a security safeguard. Any other benefits will have to be discovered along the way.
One big partnership
Quest is moving forward with more gusto as part of a blockchain partnership with leading health insurance providers.
This month, Quest launched a blockchain pilot program together with UnitedHealth (NYSE:UNH), MultiPlan, and Humana (NYSE:HUM), moving some data sharing into a blockchain platform. Having an authoritative central source for insurance provider data can speed up Quest's operations while reducing the mountains of paperwork that follow from a blood test or health screening.
The partners hope to reduce the cost of secure data storage and proper information sharing. Insiders estimate that the healthcare industry spends $2.1 billion a year on data quality processes, a figure that could be reduced to nearly nothing with a properly designed and implemented blockchain solution.
"We look forward to continuing to use our data and expertise for this project, which we believe can lower cost and improve efficiency within the healthcare system," said Quest CEO Steve Rusckowski in last week's first-quarter earnings call.
Blockchain tracking of big transactions
Visa is not shying away from newfangled technologies that appear to threaten the company's core business. Instead, blockchain is treated like an opportunity to evolve and improve Visa's own business in many ways.
The company filed a patent application in 2016, covering methods for managing a blockchain-based digital asset network. The patent included methods for identifying and screening asset holders for compliance with transfer processes and rules. In general, patent number 20170237554A1 describes the foundation of a fast and secure way to store and transfer digital assets of substantial value.
That filing is actually just one of at least 17 blockchain-related patents in Visa's portfolio, though these filings often overlap and refer to one another.
The other shoe dropped in December 2017 when Visa launched a business-to-business digital payment system built around the concepts of the patent mentioned above. The so-called Visa B2B Connect platform is currently running in a testing stage with banks from the U.S. and Southeast Asia kicking its metaphorical tires. The idea is to take friction and costs out of international money transfers, particularly for high-value transactions. Examples would include big-ticket company buyouts and multimillion-dollar equipment purchases where the buyer and seller operate in different currencies.
Visa's blockchain effort is much more than a theoretical hack. The company is pouring serious assets and efforts into blockchain research and is already getting its hands dirty with a real-world service for a hand-picked target market.