Blockchain – The next technology to transform auto finance?
Ask the man on the street what blockchain is, and they might tell you about Bitcoin, currently its most well-known and perhaps infamous application. Bitcoin is an electronic payment system which has risen to fame in recent months due to its popularity in certain parts of the dark web, such as Silk Road, a site where criminals can go to buy drugs, weapons, and services which facilitate money laundering, distribution of stolen credit card information and personal identities as well as trading in counterfeit currency, for example.
Bitcoin frightens the life out of regulators, and it has given blockchain a bad name, apparently.
Ask one of White Clarke Group’s technology innovators what blockchain is, however, and their eyes will light up – and they will spend the next hour telling you about all the possible legitimate uses of this new technology which, they will tell you, is set to revolutionize a whole range of industries including financial services.
Blockchain applications have entered the mainstream, and its legitimate uses are beginning to be explored by Tech companies, healthcare organizations, governments and banks.
So what is it?
Blockchain is basically a shared database of information which is amongst other things very secure (so secure in fact that it is relied on to manage payments by technology aware criminals and hackers - the very people who are experts in breaking traditional payment systems to commit fraud); it enables smart contracts (like payments set to trigger automatically under the right conditions); and it can be used to track things in registers (like assets and ownership).
In this latest video, a presentation at the American Financial Services Association’s Vehicle Finance Conference in Las Vegas by Haskell Garfinkel, FinTech Co-Lead at PricewaterhouseCoopers shows a detailed account of how blockchain works. The video is made available courtesy to White Clarke Group.
Why do I need to know about it?
At present there are very few applications of blockchain specifically for auto finance, so some auto finance providers may be forgiven for thinking there is not much call to watch the video. They would be wrong!
(There is of course the obvious opportunity to create registers which will more efficiently track ownership and related finance of assets like cars. This may be used, for example, to prevent or track their fraudulent sale.)
But it seems likely however that a range of other uses will emerge.
This July it was announced that Toyota Financial Services have joined R3’s consortium to explore “distributed and shared ledger tech” – that’s blockchain to you and me. They are seeking to identify “potential applications in auto financing.”
So you need to watch this space.
White Clarke Group sponsors videos from a range of finance conferences in Europe and the US, particularly where there is news of new or leading edge technology innovations which may affect the auto and asset finance industry. You can watch all their complimentary videos on the White Clarke Group website.