Blockchain-powered dispute management to reduce intercarrier settlement time by 60%

This industry view was written by Boominathan Shanmugam of Prodapt

Service providers in the Connectedness industry receive intercarrier invoices worth over USD 1.2 billion annually and are challenged with more than 25% revenue blocking due to disputes. Managing disputes and improving trust in intercarrier settlements is challenging for service providers. The traditional approaches to dispute analysis and resolution are ineffective and delay settlement for several months, and several problems, such as:

• Complex and time-consuming settlement processes due to siled teams, and reconciliation processes
• Security risk and increased OpEx due to reliance on intermediaries for settlement
• Lengthy and costly validation and verification of claims due to third-party intervention

The aforementioned challenges increase the costs of handling and resolving disputes. Therefore, service providers need to move to a smarter dispute management process to resolve revenue blockages.

This article elaborates on how service providers can leverage blockchain to automate dispute management and reduce resolution time by 60%.

Fig: Utilization blockchain-powered dispute management to reduce settlement time by 60%

Four-step approach to implementing blockchain in conflict management

1. Build a private blockchain network between service providers

Service providers are challenged with fragmented processes that delay settlements and block claims. Therefore, the development of a private blockchain network helps accelerate settlements by improving the transparency and traceability of transactions shared across the network. Service providers with an existing blockchain network can check if they have the latest release and upgrade their network to get maximum benefits.

Recommendations

• Implement Hyperledger Fabric (HLF) network, which supports identity management and provides increased security for dispute resolution
• Exploit greenfield approach to retrieve the resources from the 1.x network and push them into the 2.x network efficiently using an API layer
• Exploit external chaincode launcher to scale the chaincode at an optimized cost
• Develop a custom logic to migrate the transaction history to the upgraded network

2. Automate the mass upload of assets to the blockchain network

In the intercarrier settlement process, service providers must process hundreds of invoices per cycle. Manual processing of these invoices in batches is cumbersome. Therefore, service providers should automate the bulk upload of assets such as claims and refunds to reduce settlement time.

Fig. Automating mass upload of requirements to Hyperledger Fabric Network

Recommendations

• Take advantage of tools like Spring boot to schedule and automate mass uploading of assets to the Hyperledger Fabric network
• Implement smart contracts to validate claims before uploading them to Hyperledger
• Store current claim status in CouchDB as it is compatible with Hyperledger and supports data-rich queries. It also provides a user interface and enables quick asset retrieval
• Leverage distributed applications (Dapps) to display failed claims and the error code. This helps the business team to correct failed claims and re-upload them into the database for further processing

3. Develop smart contracts for automatic verification of assets

In the traditional approach, service providers are highly dependent on third parties to validate and verify assets such as claims and refunds. This increases the security risk and operating costs. Therefore, service providers should build smart contracts to handle various business logics agreed upon by the network members. It provides a single source of truth and establishes digital trust in partnerships. Furthermore, service providers can conduct transactions without an intermediary, eliminating the fees they owe.

Recommendations

• Leverage the “Go” programming language to develop smart contracts as it is compatible with Hyperledger and the underlying libraries
• Perform basic and advanced validations such as data mismatch, validity of claim, date range of claim and status confirmations
• Integrate the Hyperledger Fabric network with tools like Hyperledger explorer and Caliper to visualize and analyze the performance of smart contracts

4. Implement the blockchain utility modules to accelerate settlement

Service providers should implement blockchain utility modules to gain end-to-end visibility of all assets. It offers unique graphs to track all assets on a single page and understand the claim status and SLA violations. Furthermore, it helps to focus and speed up the blocked claims, thereby improving the settlement process.

To conclude

As explained in this article, the four-step approach helps service providers implement blockchain-powered dispute management and reduce reliance on intermediaries, with a simple, near-real-time, error-free reconciliation and decision process. It also helps achieve the following benefits:

• Reduce settlement time by 60%
• Reduce outstanding balances and late payment charges (LPC) by 25%
• Achieve 95%+ SLA targets with an improved settlement process
• Reduce the current average claim age by 30%

I appreciate the efforts of my colleague Priyankaa A- Analyst, Strategic Insightsfor her contribution and continuous support in the drafting of this article.

Boominathan is a hands-on technology leader with 15+ years of consulting experience. He has vast hands-on knowledge of building NextGen products and effectively implementing solutions using AI/ML, Cloud, Edge and Blockchain. He has successfully defined and delivered digital transformation programs, in collaboration with C-level leadership for globally leading telecom/digital service providers.

Boominathan is a Digital Transformation Leader at Prodapt, the leading provider of consulting, technology and managed services to the Connectedness vertical. Prodapt’s customers range from telecom operators, digital/multi-service providers (D/MSP), technology and digital platform companies within connectivity. Prodapt partners with global leaders including AT&T, Verizon, Lumen, Adtran, Vodafone, Liberty Global, Rogers, Deutsche Telekom, Google, Amazon and Microsoft among many others.

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Categories: Blockchain · Industry Viewpoint