Top Use Cases for Smart Contracts in Finance, Healthcare, and Supply Chain Management

Executed programmable protocols, often referred to as smart contracts, are dynamically disrupting industry verticals by accelerating the process, saving money and improving security.

Smart contracts, self-executing contracts, based on the rather new technology related to blockchains, enable companies to optimize processes, guarantee transparency, and exclude the middlemen. In this blog post, you will find out the most common applications of smart contracts in finance, healthcare & the supply chain management.
 

What Are Smart Contracts?

Smart contracts mean self-executing contracts that operate on the basis of a set of pre-specified triggers which direct their actions. They operate on blockchain networks which makes their records permanent and cannot be manipulated in any way which makes them safe as well.

Smart contracts eliminate third parties and automate transactions and as an outcome, it introduces efficiency in various domains, including finance, healthcare and supply chain.
 

Smart Contracts in Finance

Streamlining Financial Transactions

Smart contract applications in finance reduce the use of the middleman since transactions are done directly. For instance, loan approvals can be automated by setting certain conditions for instance; credit score confirmation and income level confirmation.
Once certain conditions are fulfilled, the loan is disbursed automatically and hence cuts down time as well as expenses.
 

Decentralized Finance (DeFi)

Among all sectors that are currently applying smart contracts, DeFi is one of the most rapidly growing. These decentralized applications (dApps) provide users with an opportunity to lend, borrow and even trade in assets without having to deal with banks or the traditional financial institutions.

This protects the rights of all the parties in the transaction in that smart contracts guarantee that all parties observe the agreed terms.
 

Fraud Prevention and Transparency

Smart contracts make financial activities more transparent and easy to trace since every transaction is written and recorded on an unalterable blockchain. This increases transparency to decrease the rate of fraud while audits can be implemented directly through the code in the smart contract.

For instance, it is possible for companies to scrutinize expenditure in order to establish compliance to the law on how funds are used.

 

 

Smart Contracts in Healthcare
 

Data Sharing and Security
 

Today data security is a very important aspect especially in the healthcare setting. Self-executing and reliable peer-to peer transfer of information concerning patients ‘health condition is possible by the use of smart contracts. for instance, hospitals and insurance companies can transfer patient electronic health records through the use of smart contracts with only prescribed access to the patient records being granted depending on the user’s authorization.
 

Insurance Claims Processing

A part of the healthcare insurance can also be implemented by smart contracts through the execution of claims. For instance, in a situation where a patient receives a treatment that been approved by the insurance company, there can be a contract at the back which validates the claim to the correct amount and make the payment without the need of a human being.

It not only accelerates the process of the claims but also minimize the overhead expenses.
 

Clinical Trials and Research

Owing to the legal requirement Patients’ consent can be challenging to handle in clinical trials. Smart contracts make this easier by storing the consent agreements on the blockchain; thus, payment or certain treatments can be initiated based on the trial’s progress.

This has the effect of ensuring compliance while at the same time increasing the level of transparency in the research.
 

Smart contracts in supply chain management.

Real-Time Tracking and Transparency

Currently the problem of supply chain management is that there is low visibility and transparency. Smart contracts can allow for tracking of goods thus ensuring that each stage is recorded and can be proven.
For example, a shipment of goods can be seen to have been shipped from the manufacturer to the consumer and each process involved recorded in the blockchain to increase accountability.
 

Smooth Integration of the Automation of Payments and Order Delivery

Smart contracts have the ability to release payments at a specified date or time or when some conditions are met. For example, Smart contract can facilitate payments to Supplier with regard to confirmed received shipment.

This automation helps in saving on time which would have been used in negotiations between the supplier and the recipient or even between the supplying and receiving departments so as to ensure that orders are completed as required.
 

Reducing Fraud and Counterfeiting

Vulnerability and protection: Fraud and counterfeiting also remain a major problem in supply chain environment. Smart contracts may be useful in ascertaining the origin of products since the product goes through different hands in the supply chain.
For instance, in the production of pharmaceuticals, the smart contracts will make sure that the products being supplied in the market are original and not fake.
 

It is also imperative to understand challenges, and considerations that may affect smart contract implementation.

However, it has not been rosy as there are flaws with smart contracts. Some challenges that are experienced by blockchain networks include; scalability and limitations as the network expands and lastly security vulnerabilities whereby hackers can take advantage of flawed code in smart contracts.

Further, there are legal restraints that must be taken into account to conform the smart contracts to industry’s standards. Pre-audit of decentralized smart contracts is a must before deploying them to prevent them from being hack prone.
 

Conclusion

This has made the finance sector adopt smart contracts and has also found application in the healthcare sector and supply chain sector. Over the years as industries put word into practice then it will lead to flexibility, efficiency, and security, of business operations through smart contracts.

It is high time companies start discovering smart contracts and implement them in their systems for long-term gain. get in touch with us and lets build something great together.