Applicability of blockchain technology to manage financial issues in the Sri Lankan construction industry

Abstract

The construction industry is one of the largest industries in any country, contributing significantly to economic growth. A range of researchers explained that the construction industry suffered from numerous issues where financial issues are more critical. Late payments, cash flow issues, and lack of security of the payment are some of them. Blockchain technology shows a potential use for managing financial activities. Therefore, this research tends to investigate the applicability of blockchain technology to manage financial issues in the Sri Lankan construction industry. A comprehensive literature survey was carried out to assess the concept of blockchain technology and identified financial issues in the construction industry. A qualitative expert opinion survey was conducted with eight construction experts who had knowledge of the blockchain technology, selected through purposive sampling to collect data in a Sri Lankan context. The collected data was analysed using the content analysis method. The findings of the expert interviews indicated that faster transactions would help to reduce late payments; removing third parties from the transaction will reduce the involvement of many parties in the transaction process; and trust, security, transparency will help to increase foreign investments. Further, the lack of knowledge in the area, legal and tax issues, low investment, and social issues will be the challenges in adopting blockchain technology to the construction industry. The research finally suggests the ways to overcome such challenges in terms of using pilot projects, government rules and regulation. Thus, the research proposes that use of blockchain technology could minimise a significant number of financial issues in the construction industry.