FCM Travel Solutions Byline by Bertrand Saillet, General Manager of FCM Travel Solutions Asia
Blockchain has been reigning as the trending tech buzzword for the past year. The technology has been making headway in Asia Pacific, predominantly in the banking and financial industry where firms have started exploring it for improving customer experience. We can expect more industries to embrace blockchain – according to the first-ever IDC blockchain forecast, Asia Pacific’s (excluding Japan) spending on blockchain solutions is forecast to reach about $282 million in 2018, almost double the amount spent in 2017.
Being digitally driven, the corporate travel industry is one that will surely evolve alongside technological innovation. We look at how blockchain can impact corporate travel in Asia, a region that dominates the business travel industry.
First things first – what is blockchain? It is an ever-growing database of transactions that are linked and secured via cryptography. Originally created for the famous Bitcoin in 2009, it is now being diversely used due to its secure nature. Another key feature is its transparency. All related users can view the data, but it is encrypted to protect identities. Blockchain data is thus accessible yet secure. Essentially, blockchain technology allows users to make transactions anonymously.
PAYMENT MADE EASIER
Blockchain may not eliminate the need for credit cards, but it can help verify the sending of card numbers during transactions. For multiple-party transactions such as those involving travel management companies (TMCs), airlines, and enterprises, blockchain can catalyze the process as all parties would be working on the same ledger. This allows instant payment between TMCs and airlines, making middlemen obsolete. When customer costs are reduced, and service sped up, we reap higher customer satisfaction.
Singapore Airlines’ loyalty program - Krisflyer - has already planned to launch the world’s first blockchain-based airline loyalty digital wallet, which would allow members to use KrisFlyer miles for purchases at participating outlets.
Smart contracting refers to the making of transactions without third parties, and due to the transparent and secure nature of blockchain, these transactions are trackable and irreversible.
When transaction data is received, payment is made and the contract automatically adjusts itself. We see smart contracting as applicable to customer loyalty programs, where members can earn and use points in real time. Blockchain-based loyalty program is especially useful during travel disruptions, as it can enable airlines to compensate and refund passengers immediately. Once again, this enhances customer satisfaction.
Blockchain technology also offers a secure identity trust framework. Tech giant IBM already has plans to use it to develop a secure identification verification program that can be enabled via smartphones. Should it succeed, travelers might not even need to carry a passport, as the system would identify the traveler directly. In Dubai, the government has already made plans to develop digital passports using biometric verification and Blockchain technology to pioneer the world’s first gateless border at Dubai Airport.
Blockchain offers great potential. Yet, there are challenges that markets in the region may face in adopting it, including lack of readiness and clarity on the regulations involved. However, as an industry we can gain a deeper understanding of its nature to facilitate its welcome. For all the hype and the potential that blockchain is foreseen to bring, we wonder, will it serve as a blessing or a blight? History tells us that each innovation eventually finds its place, but only time will tell us the level of blockchain’s eventual adoption.