Trust and Technology – AG INFORMATION NETWORK OF THE WEST

Trust and Technology

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

Entrepreneurs and investors are excited about the opportunities for more financial technology or fintech to enter the agricultural market. But it’s important to remember, says venture capitalist Mark Blackwell, that many agricultural business transactions are not easily replaced with technology.

Blackwell… “It’s very relational driven, and this is a very generalized statement, but like Marcus farmer has had a relationship with Bill at Rabobank or any one of his providers for the past 20 years. He’s banked Mark. He’s provided credit. He’s provided me insurance. He’s provided me equipment financing. And so you come in with this new shiny solution that you can demonstrate potentially the fact that they can have savings in their premiums, or potentially a reduction in the interest rate on how they think about lending. And what was most interesting to us in the field is sometimes that actually doesn’t matter. Because the embedded, ingrained relationships in some of these regional ag banks is I actually trust this individual. I’ve banked with him for 20 years and this new shiny object that you’re asking me to put tags and collars on my cows and collecting all this information and giving me all my yield information to give me a better interest rate on my lending product. That is tough.”

Blackwell added that new solutions have to offer immediate benefits, not just long term potential advantages.