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Recently, Business Insider has reported how a casino’s highly protected database was hacked via a simple lobby thermometer. The case is a practical example of how Internet of Things, aimed at simplifying life of people and improving work of facility managers, is actually posing new threats and challenges. Luckily, a promptly developing blockchain industry may allow facility managers to significantly improve cyber security of commercial and residential properties.
For several years now, blockchain is actively developing outside its traditional industries. For instance, a real estate-related project ATLANT raised over 6 mln USD during its last year‘s ICO. The project is aimed at developing an online marketplace with a more transparent real estate price formation. Everything thanks to blockchain which allows to minimize speculation and even eliminate middlemen in property trading and renting. However, in the facility management industry blockchain is still a rather fresh idea
Though facility management (FM) is considered to be just a fraction in comparison with the overall real estate industry, still the global FM market exceeds $760bn. According to Transparency Market Research (TMR), the market will more than double by 2024.
And whether it’s soft services like cleaning and waste management or hard services, including maintenance, repair and equipment management, – the competition grows in all segments. Real estate developers, property owners, governmental bodies and even smaller vendors – more and more companies enter the FM market each year.
“Naturally, the customer benefits the most from the growing competition, but the tricky part comes up during the contract transition. One FM provider passes the facility to another while keeping property data to itself or even falsifying it. And this is where a blockchain-based solution could help. If all consumption, amortization, maintenance and other historical data is kept on one platform and secured with blockchain, it would then be much easier to transit properties between market players. The data would be also secured from manipulations and fully traceable,” comments Deividas Jacka, Chief Business Development Officer at one of the largest facility managers across the Baltic States – Civinity.
Smart contracts are another area where facility managers can explore blockchain solutions. With hundreds and thousands of residential, cultural, commercial and public buildings under management, FM providers have to monitor both consumption and payments of numerous consumers. But smart contracts coupled with smart sensors can significantly fasten the process and reduce human error risks while automating the entire utility management process: collecting consumption data, proceeding payments and forming reports to both facility managers and utility providers.
It can also help in third-party management when the system automatically releases payment once the outsourced service is completed. But a major opportunity for blockchain in FM is security of the IoT network.
Today, more and more smart building equipment, globally worth of approx. $120 billion, are connected to IoT networks. These devices, whether it’s office thermostats or a boiler sensor in an apartment building, pro-actively notify building administrators on possible emergency breakdowns. They also enable collection of Big Data which allows FM providers to better plan maintenance works and allocate human resources.
But along the development of the IoT market, a larger number of building and other infrastructural objects become vulnerable. And more users become concerned of such security issues. A report by BullGuard has revealed that 60% of users are very concerned about the risk of their Internet-connected devices. The study also reports alarming statistics that approx. one third of user have already became victims of security and privacy-related incidents.
“If you have a remote access to some of your devises, it’s always a risk that someone else can get it too. And it’s not only about electricity and water consumption data, but the control over the devices themselves. Encrypting options offered by blockchain can significantly improve security of IoT systems and thus ensure higher protection of homes and facilities against intruders. Naturally, the data also becomes more secured which is particularly important in Europe under new GDPR regulations. Unfortunately, there aren’t many blockchain solutions for facility managers, at the moment. Hopefully, either third parties or FM providers themselves will show a higher interest to these technologies, and facility management will become smarter in the upcoming several years,” concludes Deividas Jacka, Chief Business Development Officer at Civinity.