Westpac has launched a proof of concept combining four of the most talked about technologies of the day: data analytics, artificial intelligence, Internet of Things and blockchain.
In what Westpac Institutional Bank’s trade finance team called a “global first”, the pilot seeks to accurately predict demand for products, optimise stock levels, identify the best time and place to buy, and fulfil the procurement and settlement process in “a completely digital way”.
The proof of concept application solves a number of business pain points, the bank said, including demand and price prediction, inventory management, forecasting and tracking.
The Internet of Things element of the POC tracks stock levels and provides real time information, data analytics and artificial intelligence work together to predict demand and price levels while blockchain creates smart contracts and executes orders.
Westpac worked with reinforcing steel supplier Ausreo and Infosys, a digital transformation consultancy on the project. The purchase system part of the POC was created on R3 Corda blockchain technology. The bank is a member of the R3 consortium of global financial institutions, which researches blockchain usage in the financial system.
Bank customers IVE and Iluka also provided insights during the development stage on how the application could apply to other industries.
“Providing our customers with the ability to maximise their working capital cycles and ensure the optimal levels of funding unleashes huge potential. The benefits extend to banking by providing insight into the entire value chain,” said Didier Van Not, general manager and head of Westpac Corporate and Institutional Bank.
Van Not stressed that the proof of concept was just that, and not yet ready for market.
Leon Valenti, Ausreo CFO, said the application showed that “blue sky is closer than we thought”.
“Demand forecasting and inventory management are key processes for us, and we are always looking for the next innovation to improve the way we do business. The project highlighted how linking the four technologies was applicable to us, improving decision making and building better business practices,” he said.
Westpac, last year collaboratedwith ANZ, IBM and shopping centre operator Scentre Group to digitise the bank guarantee process used for commercial property leasing. The distributed ledger technology eliminated the need for physical document management and the tracking and reporting of a guarantee’s status through multiple changes, the bank said at the time.
“This is a glimpse into a world where mundane manual tasks will be automated and machines will support better decision-making,” Van Not added.
“Imagining a world where businesses can automate the key decision making processes through smart technology is no longer in the realms of science fiction – it is here today.”