Business Process Models of Blockchain and South African Real Estate Transactions

Abstract

The current real estate purchasing process in South African sector can be described as inefficient due to heavy reliance on multiple third parties which results in high transaction costs and a prolonging of the time in which property transactions are completed in. Additionally, the extensive manual review and verification of financial and legal documents as well as manually updating multiple systems with redundant information not only takes time but is also prone to error and fraudulent activities. Blockchain technology presents an opportunity for the real estate sector as it has the potential to bring about more efficient transactions. This study examines two approaches to executing real estate transactions; the South African case and an international blockchain technology use case. Two conceptual models are presented using Business Process Modelling and Notation. Document review was employed in order to provide sufficient information on the real estate transactions. The findings show that the South African real estate transaction process is inefficient as it is manual, involves paper-based documents and relies heavily on third parties which result in numerous bottlenecks. The study revealed that blockchain-based transactions are more efficient and reduce reliance on third parties and manual processes. The study contributes two conceptual models illustrating how the two different processes are conducted. It also contributes a list of the challenges and opportunities related to blockchain-based real estate transactions.