Data61 and Commonwealth Bank (CBA) are on a research path to better understand the opportunities and constraints of a new kind of payment system known as “programmable money” developed through blockchain technology.
As part of the research, the two organisations have developed a proof of concept application using the National Disability Insurance Scheme (NDIS).
The app has been designed to support participants by allowing them to manage their NDIS plan by enabling them to find, book and pay for services using the programmable money, which has been designed with conditions so it knows what it can be spent on, who it can be spent by and when it can be spent.
The move by CBA to work with Data61 – a government backed organisation – instead of a private sector specialising in blockchain is a first for the bank.
Sophie Gilder, head of experimentation and blockchain at Innovation Lab of CBA, said working with Data61 on this project has provided insight for the bank it had not previously come across.
“We’ve been very keen to collaborate with Data61 due to the fact they have deep technical engineering knowledge in blockchain,” she told InnovationAus.com.
“For us, as a team specialising in blockchain technology, it’s quite difficult to find Australian companies or institutions with technical expertise in this area, and Data61 is a globally recognised engineering team with some capabilities that are really impressive. We thought it’d be fantastic to collaborate with them so we could each bring out expertise to the table.
“In addition, it’s interesting to collaborate with an organisation that comes from a slightly different perspective. We obviously come with a commercial approach whereas Data61, with their government backing, consider things with a public policy and government perspective on things.
“For many use cases we’re looking at, government is an essential partner so we’ve been getting the benefit of the Data61 insight on the likely impact on government policies,” said Ms Gilder.
Ms Gilder said the bank also appreciates the objectivity that Data61 has added to the project.
“It’s quite typical that experts in technology are entities who are also trying to sell a product. What we really value is working with another entity that will be objective about the strengths and weakness.”
“We like the fact Data61 takes a scientifically rigorous approach to assessment and they’re not in any way suggestive. They’re not trying to come out with a result or trying to sell a product they are merely saying these are the pros and cons, these are advantages and disadvantage. This balanced approach is very valuable and very rare.”
The proof of concept also received advice and feedback from government and industry bodies including Department of Social Services, Department of Human Services, The Treasury, Reserve Bank of Australia, and FinTech Australia. It is currently undergoing user testing with NDIS participants and carers.
Mark Staples, senior principal researcher in the software and computational systems program at Data61, said using the NDIS as a use case has revealed the potential of the platform.
“The NDIS use case has been a good one because it’s inherently complicated because each individual has its individualised plan and individualised budget for choosing different kinds of outcomes, and so there’s different policies and constraints. Inherently, this creates complexity in the administration of the scheme,” he said.
“We have been able to map some of those budgetary policy complaints in this framework and that’s been part of what we’ve developed in the prototype and evaluated.”
Mr Staples suggested programmable money could eventually be used for other individual government payments, as well as business-to-business payments.
CBA and Data61 will release a co-authored Making Money Smart report in November, outlining the results from the proof of concept.
Ms Gilder said she is also confident that CBA will eventually be able to deliver a commercially viable product from the trial.
“For every proof of concept we do, we have in mind that we’d like it to lead to a commercial outcome,” she said.