Project results

Reaching beyond – The role of the only bank in the project

by Ralf Hartmann on behalf of the Productive4.0 consortium

What does a bank do in a project which is meant to push the digitalisation of the European Industry? At first sight, SEB, one of the biggest banks in Sweden, appears to be rather exotic amongst all the companies, start-ups and institutes doing research on optimising their production.

Taking a closer look, however, it becomes evident that there will be no Industry4.0 without Bank4.0. Products and services are values, and with financing being the backbone of any business, technological progress has to go hand in hand on either side. In other words, it doesn’t make sense to prepare for the future while relying on yesterday’s methods of budgeting, invoicing or paying.


Micro payments to boost digitalisation

This is why SEB decided to join Productive4.0. “In order to keep pace with the development on the factory floor and the supply chain, financial services must be cheaper, faster and respond in real-time”, Christian Lagerkvist from SEB says dropping keywords like micro payment or micro invoicing. “Pushing these new financial products will help to cut overhead costs significantly,” he explains.

“Traditional transactions instead are so expensive that payments are batched on a monthly basis, just like we used to batch words on double-sided letter paper before the internet. Companies have large departments solely dedicated to invoices and payments, and the cost of these departments renders many data-driven, real-time business models financially unfeasible – simply because charging for them is too cumbersome”.

This should no longer be an impediment. SEB’s remedy is to integrate payments, invoicing, credit lines and foreign exchange into the supply chain: as soon as a shipment ends up on a loading bay, it gets scanned by a device effectively triggering a micro payment to the previous tier in the supply chain. “Transports and logistics could all of a sudden charge for effiency – per kilometre, per time unit, fuel consumption, fatigue, or even road and weather conditions” adds Caroline Berg von Linde, SEB’s internal project manager.

Being asked whether SEB manages to address the three pillars of the project Digital Production, Product Life Cycle Management and Supply Chain Network Lagerkvist says: “As a bank we can enable business models within these three pillars. We developed an interface where you connect IoT events to financial services. This way, events on the factory floor can trigger payment to other IoT devices. So we are talking about micro payments, machine to machine payments, and how mixing payments with data allows for pricing models based on real-time sensor data”.


Defining new business models

“Based on this, you can define business models that close the gap between the actual cost and the calculated cost of a product. It will help reducing working capital as well as operational risk. Procurement and automatic contract negotiation are also part of the equation”.

In the project, SEB is working closely alongside Luleå Technical University (LTU) to build a distributed ledger platform (The “Exchange Network”) to this end.

In the beginning, the SEB team spent some time evaluating different blockchain technologies such as IOTA and Ethereum, Hyperledger and Quorum, but they all have the same draw-back: privacy. When multiple parties reside on the same blockchain, it doesn’t take much effort to determine which company hides behind which address, paving the way for industrial espionage. The Exchange Network is a distributed ledger tweaked towards remedying this problem.

In work package 8 SEB is involved in “The Swedish Use-Case” together with LTU, Volvo Trucks and MidRoc but also with NXP. In short, it is about providing Volvo Truck’s treasury with real-time liquidity forecasts driven by supply chain GPS events.

In the eyes of Christian Lagerkvist, being part of Productive4.0 is a lucky shot. “Not only had we to find the right approach, we are in direct touch with the core business parts of the companies. We also had the chance to compare industrial IT architecture frameworks to the frameworks we use at the bank, which turned out to be an eye opener”.

All in all, the role of the only bank in the project could be an eye opener, too. Completely new business models based on new real-time financial services go far beyond technological details and require a holistic view on Industry4.0. In a way it reminds of the appeal in the opening speech at the project kick-off in Dresden: “It’s about technology but don’t forget about the business model!”


Technology Fourth Industrial Revolution productive4.0 digitalindustry ECSEL-JU europe SEB bank4.0 sweden
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