General Motors Financial Company (GM Financial), the financial services arm of America’s largest automobile manufacturer, has started exploring the use of blockchain technology to address issues faced by the auto finance industry.
According to a recent publication, GM Financial has partnered Spring Labs’ Spring Founding Industry Partners (SFIP) program which focuses on research, development and implementation of the Spring Protocol (a blockchain-based network) prior to its public launch.
The Spring Protocol through its blockchain–based network will allow network participants to exchange information without sharing underlying source data. The Spring Protocol was created with an aim to curb irregularities in the auto finance industry such as synthetic identity fraud, exchange of identity and falsified identity verification; the platform looks to proffer a more transparent, efficient and secure system for consumer financial data than the current system.
Speaking on the necessity of the partnership, Mike Kanarois Chief Strategy Officer at GM Financial believes the Spring Labs blockchain protocol will help the company in its fight against synthetic identity theft – a common practice where criminals use stolen and fake information to create a new identity, open fraudulent accounts and make fraudulent purchases and other illicit practices.
The CSO also regrettably states that the identity fraud cases are costing the company millions of dollars yearly leading to losses of inventory and wasteful prevention costs. Kanarios reiterates that a blockchain-based identity verification system will provide faster, efficient and cheaper systems devoid of the flaws of the current process.
In his words:
As a captive finance arm for General Motors GM and one of the world’s largest auto finance providers, we are continually innovating and evolving our fraud prevention and detection capabilities to better serve and protect our customers and dealers. Today’s announcement underscores our commitment and investment to advance these efforts.
Asides the partnership with SFIP, GM Financial had also joined Hyperledger in 2017 in an effort to advance cross-industry blockchain technologies. GM is also a member of MOBI (Mobility Open Blockchain Initiative) launched in May 2018, MOBI is a group specifically formed to explore the potential of blockchain in the automobile industry. MOBI also hosts other members including: BMW, Groupe Renault, Accenture, Ford, IBM, Bosch and World Economic Forum.
GM is also credited to have filed a patent application for a “method and system using blockchain database for data exchange between vehicles and entities.
In all, the benefits of blockchain technology to the auto industry is predicted to be heralded by three service areas; Finance, Supply Chain and Mobility. Also, though blockchain tech is still in its infancy stage, automotive companies as well as industry players have to a great extent affirmed its usability; with a recent survey by IBM showing 62% of auto executives affirming blockchain’s potential effect in the sector by 2021.