Part 1 – Asset Identification
Asset Finance - Rethink the asset register: Part 1
It can’t be done.
— Almost every Chief Risk Officer ever
It can’t be done is the standard response to the question of why the asset finance industry does not have an asset register that works for all assets beyond the motor industry.
In this four-part series, we will explore why so many think one asset register for all asset types is so hard to build. Then we'll show the fundamentals Open Assets has applied to disprove this. Finally, we’ll demonstrate a simple solution to allow the asset finance industry to identify any asset accurately with minimal effort and secure its financial interest.
This series will split the problem into four articles based on the key issues identified:
Asset Identity - a common way to represent any asset digitally
Asset Identity Verification - confirming the identity matches the real-world asset
The Financed Asset - the combination of asset identities and additional data that create a complete picture of an asset
Open Assets Register - a database of assets and the parties with a financial interest in them
First, let’s discuss what asset identification means in the broad sense.
Asset Identity
A common way to represent an asset digitally
This article will discuss how Open Assets can accurately create a digital asset identity for any asset. Then you'll see how anyone can find an asset identity through a simple search.
Why create an asset identity?
Before we discuss the importance of asset identities to an asset interest register, let’s first step back and look at the big picture.
If we could identify any asset correctly, we would be able to solve most asset-related issues the asset finance industry faces. We could link data from multiple sources to understand the associated risks of an asset.
This idea is already visible with vehicles in the motor sector. The VIN allows the motor finance industry to run efficiently at scale whilst managing security risks. This is possible because data collection is automated, made possible by the common VIN identifier recognised across organisations. Many different entities distribute the effort of building a picture of a vehicle. For instance:
Stolen status through Police data
Vehicle specifications through SMMT data
MOT and tax status through DVLA data
… the list goes on (valuations, V5C log book history, scraped status)
The same concept can be found in other asset classes, such as vessels via an IMO (International Maritime Organisation number). However, all of these standards continue to be bound by asset type.
By creating a single asset identity standard regardless of asset type, we can provide the foundation to gather asset data in a more automated way. It should utilise the standards already in place for some asset sectors but not be limited by them. This standard would enable solutions like a single asset register. At Open Assets, we believe in this concept, which is at the heart of everything we create.
What is the problem with asset identification right now?
Most assets have a serial number assigned by the manufacturer or an identifier provided by a globally recognised standard, like VIN (vehicles) or IMO (vessels). However, these identifiers do not guarantee uniqueness across all asset types. In extreme instances, such as Boeing Aircrafts, a serial number isn’t even unique across the manufacturer’s own product lines.
These issues become problematic when organisations like asset funders try to register the assets they have financed within a shared central data store. If you use only the identifier assigned to the asset, another manufacturer could have used the same identifier. Cases like a VIN or IMO are no exceptions. It’s not hard to imagine an IMO such as 9648714 being used as a serial number on another hard asset.
The issue comes from a lack of standards around asset identification. It is unreasonable to assume that all asset manufacturers will group to create a globally recognised identifier. Hence the asset finance industry must champion an alternative solution to drive change.
The solution
Under the hood of Open Assets Identity
How can we replicate the benefits provided by a VIN while catering for any asset?
Open Assets has developed a 3-part identification system that can correctly identify any asset regardless of the asset type or existing identifiers. The three parts of the identifier are:
Primary Identifier
Attribute 1
Attribute 2
These three properties of an asset can be used to identify any asset uniquely. Most commonly, the three fields will equate to:
Serial Number (Manufacturer assigned serial number)
Make (Manufacturers brand name)
Model (The model name given by the manufacturer)
In the instance of a vehicle, this would change to:
VIN (Vehicle identification number)
Make (Manufacturers brand name)
Model (The model name assigned by the manufacturer)
But for complex scenarios such as property, we can use:
UPRN (Unique Property Reference Number maintained by the UK government)
Postcode
Building name/number
We are working on guidelines for several asset types to ensure the same attributes are used for an asset type. Remember that most assets will use the serial number or VIN structure. Later we’ll discuss how the search process makes it even easier to create asset identities regardless of the asset type or knowing the guidelines for the three parts of the identity.
Regardless, with these three attributes of an asset, we can create a uniquely identifiable record to represent it and provide a universal identity for the asset that can be understood quickly by anyone.
How do we ensure data quality?
Assets are assigned a unique 24-character OAI (Open Asset ID) when created. An example would be OAI-03QVHG-6853XW-T62CWP. This alphanumeric ID can then be used as the single entry point to discuss any asset in any context and with anyone. In addition, the OAI can be used to query Open Assets, for free, to find the 3-part identifier that it represents, which includes the common attributes (for example, make and model) that anyone can use to identify it easily. Thus, laying the foundations for frictionless communication.
This OAI is unique to the 3-part identifier and assigned during creation. Therefore, if any organisation uses the same 3-part identifier, the same OAI will always be returned, regardless of spelling mistakes. This is made possible with advanced machine learning (AI) to correct misspellings and match common abbreviations of brand and model names.
This next part of the solution removes the complexity of creating assets. It reduces the need for additional quality checks and speeds up the creation process by removing the entry of all three parts of the 3-part identifier.
When working with an asset, you should first search to try and find the asset’s identity. To do so, you only need the primary identifier. In the example below, we’ll use a serial number.
We’ll search for an asset identity with the serial number: 90012, where the results may return several matches across multiple manufacturers.
Results:
OAI: OAI-DYNDRM-C814XP-H74MFZ
Serial Number: 90012
Make: Dell
Model: PowerEdge MX840COAI: OAI-A96Y8F-ZC7RW5-YGZUGU
Serial Number: 90012
Make: JCB
Model: 18-220KVAAt this stage, we can see two matches found in the system. As a user, there are two scenarios
your asset is in the results, and I can use the OAI provided.
your asset isn’t in the results, so I’ll create it
This process allows you to decide if an asset matches your details, regardless of whether you know all the details or if there are alternative spellings. In the example above, you could have been told that the asset is a “JCB Generator 18 220KVA”. Even though the details don’t match exactly, it is easy to see that your asset is the second result.
What if I don’t know all the details?
For those wondering if they can use Open Assets in scenarios where the primary identifier or make is unknown, we do support this. A temporary identity is created when the serial number or make is unknown. However, this identity can only be seen by the organisation that created it until the serial number and make are populated.
Challenging the misconceptions
A common misconception is that to create a successful asset identity database, you must have access to all the assets that ever existed and all the assets that will ever exist. This is, of course, one way to solve the issue of asset identification, but it is clearly not feasible.
Instead, as an industry, we can create identities as we need them. For example, you will only need to search for the outstanding financial interest in an asset after the funder has created the asset identity. Using technology as a guide, we distribute the effort of creating an accurate asset identity database by crowdsourcing the information as and when it becomes of interest.
Using these concepts, Open Assets has produced a highly flexible and scalable system that can cater for any asset in any context. Open Assets Identity is the product that powers these concepts. We believe that everyone should have access to this solution. This is why we have made Open Assets Identity a standalone solution. You do not need to buy into any other product we offer to gain the benefits Open Assets Identity provides.
Conclusion
It appears obvious now that to create a successful asset interest register, we must first be able to identify any asset accurately. This will allow us to confidently say that a funder already has or doesn’t have a financial interest in an asset.
Accurately identifying assets is not the only known issue with creating an asset register. The second part of this series will discuss asset identity verification. It will detail how the attributes of the 3-part identifier can be verified to avoid mistakes, reduce risk and increase confidence in an asset interest register data.
If you want to learn more about the Open Assets Identity product, don’t hesitate to contact us at hello@open-assets.co.uk. It would be great to hear from you.