GM Financial, the sub-division of the General Motors conglomerate, known for offering leasing, financing, and lending products to GM customers and dealerships, has announced a partnership with Spring Labs blockchain start-up, raising $ 15 million last spring. The car lender will join the Spring Founding Industry Partners program to collaborate with Spring Labs in the development of its blockchain products, the first of which should be launched in the first half of 2019. Spring Labs initially thought it was possible to develop a series of use cases that would fit some of GM Financial’s top business priorities as a lender or potentially as GM’s parent company, according to the general manager of Spring Labs, Adam Jiwan.
This is not GM’s first foray into the blockchain, it joined Hyperledger, a group working on the development of open source technologies for businesses, which also includes IBM members JP Morgan and FedEx in late 2017. For GM Financial’s chief financial officer, Mike Kanarios, the partnership with Spring Labs was a natural fit as GM continued to dive into the blockchain. GM strongly believe that they possess the biggest momentum in this space, right now. The start-up is developing a protocol that will allow businesses to securely exchange and verify sensitive information, such as a customer’s credit history. According to Jiwan, this could help lending institutions and other institutions to share customer identity information without compromising customer privacy, which would make it easier for anyone to identify fraudulent players.
Using Blockchain Tech To Build Strong Defences Against Fraud
Kanarios says the Spring Labs Protocol could help GM Financial in its fight against synthetic identity fraud. When fraudsters use real or fake identity information to create new identities and make purchases, such frauds cost GM Financial millions of dollars a year in both losses of inventory and prevention costs. A blockchain-based identity verification program has the potential to be a faster, and cheaper system than any of the lender’s current processes.
And while Synthetic Identity Fraud is a particularly difficult problem for GM Financial and other auto lenders because of the high cost of a lost product (an SUV bought fraudulently from a dealership might be impossible to recover, for example). A blockchain use case like this could be suitable for lenders in various sectors. However, the implications of the protocol in the automotive sector could go beyond simple loans. Many imagine future use cases such as chain block registries and payment systems for shared vehicle contracts, for example.
David Treat, the General Manager and Global Head of Blockchain at Accenture, believes that blockchain use in general in the automotive industry could cover all areas, from insurance to traffic control, to urban planning, autonomous cars, and AI, which makes driving safer. and more effective. These three results benefit enormously from the good types of data shared, according to Treat.
Other Automotive Companies Consider Adopting Blockchain Technology
Like Accenture, GM is a member of the Mobility Open Blockchain Initiative (MOBI), a group dedicated to exploring applications of this type. BMW, Ford and Groupe Renault are also members of this very same organization and have all expressed their interests in the tremendous potential that blockchain technology holds for the automotive industry as a whole. However, there are still major hurdles to overcome before the blockchain becomes the norm in all sectors – companies must find ways to implement the new technology on a massive scale, comply with regulations and preserve the confidentiality of the customers.
In addition, a solution based on the blockchain does not always meet the needs of each company. But for Kanarios, the potential is too important to ignore. Of course, there are … challenges, to implementing this technology, but it’s one of those things that GM has wanted to get involved in to make sure that it is taking advantage of the technology. While the industry faces vintage old problems, like supply chain management and vehicle safety issues, new challenges continue to call for technological innovation and the evolution of industry standards. To help with this, the introduction of blockchain technology has been a great booster for the industry. The blockchain has clear application for providing greater oversight and accountability in automotive supply chains and can also help drivers view and understand how and their vehicle’s data is being shared and utilized. Unique sales models, such as Tesla’s deposit-dependent formula, will become more widespread as autonomous prototypes and other innovative models hit the market. Smart contract technology will eventually ensure that tangible milestones create more accountability in ensuring timely delivery of the product.
McKinsey has already predicted that the entire market for monetizing vehicle data could be worth as much as $750 billion by 2030. 32 of 44 car brands currently offer some form or the other of vehicle-to-vehicle communication devices in their 2018 models, illustrating that data collection is already normal for the automotive industry. And it is believed that this trend is only going to accelerate with connectivity taking over the world. According to Intel, just one autonomous vehicle will generate about 4,000 gigabytes of data per day and while these changes are inevitable, leaving this gathered data unsecured or only loosely secured can’t be acceptable. Therefore, utilizing blockchain technology may prove a way to allow users greater oversight into exactly who is accessing their data, and grant the user more leverage when it comes to consenting to how their data is used.
The integration of blockchain and automotive technologies has resulted in some exciting solutions to most of the pressing automotive issues today, especially those prominent in the connected car industry. Additionally, it improved the transparency in different processes involved in the production of the automobile. The power of blockchain technology will most definitely drive innovation and solutions across the entire automotive ecosystem. It is safe to say we are seeing the emergence of the blockchain automotive industry now and can expect to say greater achievements in the near future.