In the experiment, it was imagined that the crop sprayer was co-owned by three farmers.
“Managed through smart contracts, the platform aimed to enhance trust and transparency of asset availability to all participants by integrating smart-lock functionality that could be automatically locked or unlocked when a payment is made,” the bank said. “This would enable assets to be easily shared without requiring any intervention from the owner.”
The intention is for the dashboard to enable “fractional ownership” of assets that ultimately manage themselves. Agriculture is particularly ripe for such platforms given that assets like tractors and sprayers are expensive, and not often used for much of the year, the bank said.
“Owners often pay big money upfront for the asset, but it causes a drag on profit margins if it lies idle, waiting to be used. In farming, we know it’s very common for specialised and expensive equipment to be underutilised for much of the year,” said Tim Harvey, CBA’s general manager of strategy, innovation and operations for regional agribusiness banking.
CBA first hinted it was exploring self-managing assets and machines late last year. The bank envisages a future ‘machine-to-machine (M2M) economy’ in which assets not only have their own bank accounts to pay for part sand maintenance, but can also be leased by the hour.
The M2M economy, will be “especially significant” for agriculture, the bank says, adding that it has identified 20 use cases for experimentation.
CBA is working with EY’s Paul Brody to develop its approach to M2M. Brody was a lead on IBM’s ADEPT (Autonomous Decentralised Peer-to-Peer Telemetry) project, which used blockchains as ledgers for transactions between devices.
The project created semi-autonomous appliances that could perform predictive maintenance, then use a virtual “wallet” to order parts and supplies.
“The interplay between blockchain, smart contracts and IoT with high-value assets is a significant development towards maximising the value that businesses get out of their assets. By developing a platform that offers fractional ownership as well as a sharing marketplace, customers will be able to reduce costs of asset ownership and maximise utilisation,” said Brody, now global innovation leader, blockchain technology at EY, said.
Reap what you share
The platform is part of a wider smart asset experiment currently underway by CBA. The bank has also been working with three real-life farmers in South Australia, who together bought a tractor to be used between them.
The farmers formed a legal entity under which they could share the finance and ownership of the new tractor, and fitted it with sensors that provide data on its usage and maintenance status.
However, the data captured was difficult to scrutinise.
“Originally, we had a data capturing system that was fairly weak and very clunky, to the point we weren’t using it. To extract that data and develop it, we needed assistance,” said one of the Tintinara farmers, Andrew Johnson.
“In particular, the people at CommBank assisted in making the data readable and usable, by working out a way to harness the variable data inputs – and make sense of what they were telling us,” said Johnson, who runs diversified family farming operation, the Mt Boothby Pastoral Company.
“We were then able to bring that back in to make decisions on how we operated the machines,” he added.
The approach has created something of a stir within the SA farming community.
“Initially we heard ‘that won’t work’ … now we’re at the point where we get calls asking to be involved or how you go about setting these types of things up. While change is hard to take, they’re prepared to listen and watch – I guess there are lots of people watching where we are at the moment,” Johnson said.
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