Blockchain for social good | Blockchain Technology | Deloitte Netherlands

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Blockchain for social good

Building blocks for successful solutions in the humanitarian industry

Blockchain technology holds the promise of greater efficiency, transparency and new ways of collaborating in many different industries. And while solutions are slowly coming to life in the private sector, it is exciting to see the technology getting traction in the non-profit industry. In this article we will discuss lessons learned based on our experience in the humanitarian space.

April 26, 2019

In the past years we have seen organizations like the World Food Programme (WFP), Red Cross and UNHCR exploring the value of the blockchain, realizing proofs-of-concept and rolling out solutions. Cases vary from cash-based transfers in refugee camps (WFP), to the creation of digital wallet to fund beneficiaries in disaster areas (Red Cross) or taking it a step further and exploring credential wallets for refugees to self-manage their data (UNHCR). These cases are exemplary for how blockchain can make a real impact, but also highlight the complexity in terms of people and environment. Based on our experience we believe the following building blocks are fundamental in paving the way for large-scale solutions.

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1. User-centric design is key

Refugees and people who require emergency aid might be the most challenging target groups to service. As background, level of education and economic means greatly differ it is challenging to find the common denominator, other than being in a humanitarian crisis. In designing and rolling out solutions this is problematic as a one-size-fits-all solution might exclude certain groups, often the most vulnerable ones. By adopting a human-centric approach to understanding the situation, needs and motivations of users, applications can be developed that can be made to fit different user groups. Focusing on the user needs helps in understanding the value proposition and is a stepping stone to creating a viable business case.

2. There needs to be a business case

NGOs and humanitarian businesses operate – in many ways – like commercial companies. While these organization do not focus on financial profits, there are cost and investments that need to be justified to donors. Therefore new solutions need a clear business case, showing the potential cost savings or the value proposition for different stakeholders. The benefits of blockchain only come to fruition in a network of stakeholders, so addressing the value creation for each of them is key.

3. Standardization is fundamental for effective coordination

In case of a disaster, coordination and timeliness are crucial in delivering aid fast. There are often multiple organizations present in the same area, reliant on complex supply chains and logistics for the delivery of goods coming from third parties. Limited infrastructure (see final point) creates even more barriers to delivery. Challenges are increased when organizations work with different systems and data definitions. Actions and number of items are often duplicated due to semantic or data formatting differences and a general lack of standardization. While blockchain provides a powerful technical solution to work on a shared infrastructure, the agreements on standards and governance around such system are of great importance. Due to the amount of stakeholders these standardization processes are often slow and therefore ignored. However, they are foundational to successful solutions and should not be underestimated or undervalued.

4. You need a strategy to scale

Having a strategy is not specific for the humanitarian industry, but it is one of the main reasons that solutions don’t take off or cannot scale. In the past years we have seen many proof-of-concepts being launched, and many being discontinued. Because blockchain requires collaboration with many different stakeholders, their involvement in the early phase is incredibly important, but often overlooked. Onboarding at a later stage can be difficult due to lack of inclusion in the development and misalignment of goals. A good strategy starts with the assessment of the desirability, viability and feasibility of solution, before starting to build. Only if all areas are positively validated the building can start, but you should also prepare for a negative result sending you back to the drawing board. Blockchain solutions are never just a technical application, but require a parallel approach on business, legal & compliance implications, and consortium efforts. As stated above, collaboration between stakeholders (ideally leveraging private/public partnerships and expertise) is crucial in launching solutions at scale.

5. Data is almost always sensitive

Humanitarian aid organizations service some of the most vulnerable groups of the population. Data which is collected from users may reflect their behavior, background, needs or relationships, even going as far as biometric measurements, making it sensitive and valuable data. A frequently mentioned use case of blockchain is to provide people with a self-sovereign identity. Regardless whether a beneficiary is enabled to control their own data, a solid data strategy should be in place to safeguard against misuse by bad actors. A data risk strategy should be in place, looking at things like data minimalization, pseudonymization, trust levels, access management, secure storage, accountability and data governance.

6. Local conditions and complex geographies create barriers

Many of the large humanitarian organizations operate in emergency and disaster areas. Blockchain has the potential to speed up the process of aid delivery, identification and distribution of funds, but a basic requirement is to have internet access and a supporting technical infrastructure such as smartphones. This is not always feasible in disaster areas. In case of hurricane Irma, hitting Saint Martin in 2017, nothing but wreckage was left on the island, leaving people disconnected from the world for days. Understanding the conditions and local infrastructure is crucial in the development of the architectural and operational design of solutions, for example designing with offline usage in mind.

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As we move beyond the proof-of-concept phase that characterized the past years, we see the learnings above as key elements to scale solutions in the humanitarian space. Even though the environments these organizations operate in are complex, they can be navigated with a clear strategy, eye for the unique circumstances, and adoption of a human-centered approach.

If you want to know more about blockchain strategy, implementation and consortium building, please contact Anna Klapwijk or Jacques Buith.

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