Can two industries with apparently different purposes really be thought of as comparable and able to support each other? The answer – yes, absolutely, says Chrissie Freear of the PwC Agri-tech team.
As joint leader of PwC’s R&D Financial Services team and recently taking on the exciting task of forming PwC’s Agri-tech team with PwC partner, Stephen Oldfield, I often get asked – “What’s the connection between Agri-tech and Fintech? How can you specialise in both?”
For me, it’s obvious – not only are both embracing many of the same technologies, such as blockchain, robotics and AI (Artificial Intelligence), and can clearly benefit from working together in evolving the application of these technologies – Agri-tech and Fintech businesses can support each other to solve strategic problems and grasp opportunities.
I recently came across a business that has developed a solution that combines satellite imagery, drone technology and data analytics to help farmers track crop performance more accurately. In developing their solution, the business identified the possibility of extending its use to the Insurance market to solve one of the major issues faced by Agri Insurers – how to accurately and easily value agricultural loss events. By using the data analytics and machine learning provided by this Agri-tech solution, insurers have a more accurate picture of the actual loss to farmers from insured events.
This is just one example of how tech innovations from one sector can be used to solve issues in another. There are many more, including the use of innovative weather prediction technology originally developed for the insurance market to help farmers identify potential future risks to crops.
However, this is more than just the sharing of technical solutions, Fintech and Agri-tech businesses have the opportunity to work together to achieve substantial and sustainable growth. Globally, one of the challenges facing the agricultural sector is that it is still fragmented and unorganised in certain key countries such as India and Africa, where the industry is dominated by smallholders. And this negatively impacts productivity.
It’s clear Agri-tech businesses have a fundamental role to play in overcoming productivity issues and many have developed brilliant solutions to help, but Fintech businesses also have a role to play. Many Fintech businesses offer new and innovative ways of accessing finance and marketplaces – using digital solutions accessed via mobile devices. This is particularly important in countries like Kenya and Rwanda where traditional methods of accessing global markets or providing finance are of limited use to smallholders due to the lack of credit history on which banks justify loans. Providing smallholders with a bigger marketplace and greater access to finance means that they are not only able to benefit from the productivity increases offered by scale, but also to finance for the purchase of Agri-tech solutions which provide major productivity improvements.
I can see a real benefit of Fintech and Agri-tech businesses collaborating and working together, not only in developing technology but also in going to market to offer their products and services, helping to solve real-world problems.
A goal of the newly formed PwC Agritech team is to bring together knowledge, experience and relationships from other industries to help support Agri-tech businesses.