The global Blockchain in Small and Medium Businesses Market is estimated to surpass $4.5 billion mark by 2026 growing at an estimated CAGR of more than 20.59% during the forecast period 2021 to 2026. The Blockchain technology is mainly designed to enable the maintenance of a permission less distributed databases which consists of a growing list of data records that preserves the integrity, singularity and validity of the stored information, without involving any trusted third party for verification purposes. It has potential to protect the identities of the user that make Blockchain a more secure way to carry out transaction. With the modernization in every sector especially by digitalization of currency; Blockchain technology has penetrated deeply into all the industries verticals. The various industry verticals that use Blockchain technology include banking financial services & insurance (BFSI), information and communication, healthcare, logistics, supply chain & transportation, e-commerce and retail and others.
Blockchain in Small and Medium Businesses Market Segment Analysis – By Product and Services
Bitcoin-based payroll service can save both money and time while, transferring money internationally. The technology would provide digitally permanent, audit-able records that show stakeholders the state of the product at each value-added step. The Blockchain technology is therefore expected to acquire exponential growth. However, Lack of awareness about the blockchain technology is the major restraint in the overall growth of the market. Blockchain has brought revolutionary changes in SMB (small and medium sized businesses) sector. With Blockchain technology now traders across the globe got an opportunity to exchange confidential information and other transactional activities in an encrypted and veritable environment. This include contract signing, invoicing, insurance policies, and other bill payments.
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Blockchain in Small and Medium Businesses Market Segment Analysis – By Application
While blockchain is significantly adopted in financial sector, the proportion of SMEs adoption blockchain is higher in the retail sector. Blockchain in Retail Market have lot of areas of application including Improving trust and transparency by which chronological data provided by blockchain help customers to keep track of every point of supply chain, validity of brands for customers who are brand conscious are always facing the fear of weather the product is being sold is original or replica, supply chain and inventory management where blockchain manage supply chain and inventory management for retailers without hassle, payments and E-commerce, automated customer service. This significant avenues of application are set to drive the market.
Blockchain in Small and Medium Businesses Market Segment Analysis – By Geography
Geographically, North America is the leading market in terms of adoption of blockchain technology across the various SME applications. The U.S. has the highest number of SME companies that have adopted blockchain technology. Europe is the next leading marketplace, Germany leading the market in the adoption of high-technological-based cars where blockchain adoption has been growing. With automobiles becoming largely automatic and more software oriented, the automotive industry is entering a new age of digitization. In our field of vision, this is where the blockchain revolution can be a pivotal enabler of change. The presence of major market players and growing concerns for forgery in the region has propelled the adoption of blockchain in BFSI sector.
Blockchain in Small and Medium Businesses Market Drivers
Growth in Demand for Increased Scalability, Transaction Speed, and Reduction In Processing Costs
Blockchain technology in banking and finance sector is disrupting with its enhanced cryptographic security and transparency. It is estimated that 45% of financial institutions are vulnerable to financial crimes regularly, which is one of the major factors that banks and financial institutions are shifting towards blockchain solutions. Transactions performed through blockchain can eliminate third-party payment gateways resulting in fast-paced financial transactions. Thus, such factors are expected to provide major opportunities for the market growth in the upcoming years. Furthermore, blockchain is typically known for its enhanced security as it provides cryptographic security for its databases and transactions which is also the key factor that adds transparency and helps in fraud reduction hence, is expected to boost the market growth.
Rising Digitalization set up to drive adoption of Blockchain
Rising digitalization has been acting as a major driving factor towards boosting the market growth of blockchain technology. With technological advancements and digitalization, adoption of blockchain technology is gaining much popularity across various industries. Usage of blockchain technology helps in reducing the manpower requirement which leads to less human error thus acting as a secured and time efficient tool. Moreover, blockchain solutions help in removing the need for middlemen in application areas like payments and real estate, causing faster transactions. This ultimately attracts the industries to digitalise and replace their existing systems with a unified blockchain based system to get a more efficient and flexible experience. Due to dominance for adopting digitalised technology for improvement of work processes, major industries have been propelling the demands for blockchain market.
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Blockchain in Small and Medium Businesses Market Challenges
Data Security Challenges
Security and privacy concerns are some major factors that are restricting the growth of blockchain technology in the market. Rising rate of cybercrimes has been adversely affecting the deployments of blockchain technology across various industries. Though the transactions offer high levels of transparency and security, there are still chances of financial data records getting hacked by cyber criminals. Loss of financial transaction data records from any reason can have a negative impact on the market growth of any organization. Data protection is one of the major factors for efficient and reliable transaction management in order to improve customer satisfaction. High concerns regarding safety and security of blockchain technology has been causing lesser adoption by the organizations, thus restraining its market growth.
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Blockchain in Small and Medium Businesses Market. IBM, Accenture, Microsoft, Tech Mahindra, HCL Technologies, Xain, SAP SE, Oracle Corporation, Amazon Web Services, ConsenSys and others are considered to be the key players of the Blockchain in Small and Medium Businesses Market.
In December 2019, Bitfury had launched a corporate blockchain platform named Exonum Enterprise. With this launch, the company claimed to help large companies in optimization of processes along with increased transparency.Exonum offers managing upto 5000 transactions within a second along with providing a dashboard to help users track blockchain activity. This solution has been linked with bitcoin’s blockchain which acts as a bridge between a system with limited access and a fully public network.
In March 2020, Alphapoint successfully raised $5.6 million in an additional funding round, taking its total capital raised to date to $23.9 million. The latest investment will go towards developing new trading features including improved margin trading and liquidity solutions and advanced brokerage capabilities.
The multitudinal benefits of Blockchain technology such as providing a concrete digital records that are auditable and the availability of checking the status of the products in every phase possible are considered to be the major drivers of Blockchain Market for Small and Medium Businesses.
With the growth and future of the $16 trillion international trade market heavily relies upon the easily availability and robustness of financial mechanisms, Blockchain technology emerged as the viable option establishing a clear chain of financial services. This is likely to fuel the growth of the market in the future.
People are concerned about service centres and garages fitting counterfeit spare parts into their vehicle. A Blockchain-based system will help the service centre, or the car manufacturer and the customer to trace the provenance of spare parts in every step of the supply chain, thus reducing the damage to brand reputation.
The blockchain platform is designed for this Machine-to-machine (M2M) economy. A Blockchain Mobility platform helps to become responsible towards maintaining new electric car products and services. This helps to build a healthy ecosystem culture to shift away from gas burning vehicles.
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