New tamper-proof tag
could help to stamp out fraud, developers claim. Claire Hack
reports.
Go deeper with GlobalData
Asset verification for the
purposes of fraud prevention is not a new concept.
The need for it has been
around for a long time, and increased during the recession as
lessees faced difficult circumstances and the likelihood of fraud
increased.
In order to keep sufficiently
close tabs on assets, it has been necessary in the past to carry
out physical audits. Methods have included electronic tracking
systems, and specially designed, lessor-branded stickers affixed to
assets. But most of these systems have been vulnerable to
tampering.
Electronic tracking was
easily removable and could be attached to other objects, while
stickers have been subject to removal methods involving everything
from hairdryers and razor blades to high strength chemical glue
removers.
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By GlobalData
The
concept
Enter UK start-up asset
verification company The Asset Works. Its concept is simple:
founding directors Mike Chowney and David de Silva have designed a
device based on GPS technology which they claim is completely
tamper proof.
“Our challenge was to come up
with a tag that cannot be removed without The Asset Works becoming
aware,” Chowney says.
A small tag, containing an
antenna and microchip, along with the lessor’s branding and
statement of their interest, is fixed to an asset before it is
delivered to the lessee.
The lessee is then sent a
handheld electronic reader and scans each tagged asset to confirm
its location by a global positioning system (GPS), at intervals
designated by the lessor.
The data is relayed to
servers by a general packet radio service and an email sent to the
lessor if anything is wrong. If the tag is removed, the antenna
will be shredded and the microchip damaged, putting the whole thing
beyond repair and meaning there is no way to remove it and affix it
to a different asset.
GPS locations can be obtained
for all assets, even those underground or deep inside buildings, so
that lessors are able to ensure that assets are always be accounted
for. Assets can also be checked against The Asset Works’ database
to help prevent multiple financing.
Accidental
beginning
The company’s founding duo
hit on the idea for the new technology almost by accident. Both
were approached regarding asset verification in their former jobs
(de Silva was in remarketing; Chowney, an accountant, was the
European CEO of an Israeli technology company), and they assumed
that a system must already exist.
“One of our first clients
came to us and said: ‘We have been looking around for a company
that does this across Europe, South East Asia and North America and
we can’t find anybody,’” de Silva says.
Chowney adds: “We started off
doing physical verification. It only tells you the situation today
– it is not a very scalable solution. It’s very labour intensive
and it’s not cost effective.
“We figured there must be a
smarter way to make it cheaper and achieve greater
deployment.”
After three months of
research, they became certain that there was nothing on the market,
and decided they could be the ones to develop it. The company came
into existence 18 months ago.
Anti-cheat
claims
The system has been designed
to make it impossible to cheat, the company claims. Once more
companies are on board, the effect will be to create a huge asset
register, potentially accounting for every leased item at any given
time.
The cost of to lessors is
calculated per tag and per verification (the number of times each
asset is verified in a year). A lower cost, standby option allows
for verification to begin if and when necessary.
The Asset Works has also
developed a risk matrix, which helps lessors to determine which
assets should be tagged and verified and at what frequency. The
matrix is based on asset value and risk factors such as lessee
credit rating and industry type.
Proprietary
appeal
With just two clients signed
up so far – BNP Paribas Leasing Solutions and Fortis Lease – the
service remains relatively untested.
However the two directors
have visited 20 of the top 30 lessors in Europe, and claim that a
European country leasing association is interested in the
product.
Chowney says: “They are very
keen on our service and their members account for 96% of leasing in
that territory.”
De Silva says: “If we get
another customer, revenues will increase by 30%. We are hoping to
have five of the largest leasing companies as clients by the end of
the year. In five years, we want 40 clients.
“It is really exciting. We have proprietary technology and
it has been well received.”
